Bank of India revises lending rates on retail loans

MUMBAI: State-run Bank of India today said it has decided to reduce its interest rates on retail loans, including home and vehicle loans, with effect from today.

The bank earlier reduced its minimum lending rates or marginal cost of funds based lending rates (MCLR) by up to 90 basis points, effective January 7, it said in a release here.

"The revision in rate of interest on retail loans is a consequence of reduction in MCLR," it said.

The rate on home loans has been lowered to 8.65 % for women borrowers, while for others the rate has been set at 8.70 %.

The bank has reduced the interest rates for vehicle loans to 9.35 per cent.

For loan against property, the new rates are set in the range of 10.50-11 per cent.

The rates for women borrowers will be 0.5 per cent lower than the others, the bank said.

Many banks like State Bank of India, Bank of Baroda, ICICI Bank, HDFC Bank and others have reduced their lending rates after they were flushed with funds following the government's move to demonetise high currency notes on November 8 last year.

Source: ET Realty

Sebi for easy entry of insurers, pension funds

Capital markets regulator Sebi is planning to ease entry barriers for domestic institutional investors like insurers and pension funds to encourage robust inflows into the Reits and Investment Trusts (InvITs) markets.

“Sebi is sitting down with the Irdai and the PFRDA to evolve a set of guidelines to ensure that insurers and pension funds do not face much of entry barriers into the Reits and InvITs. This is what we are working on now,” Sebi whole-time member G Mahalingam said on Friday.

“This is definitely going to come through at some point in time. I am sure the norms will come out fast and I am also sure domestic institutional investors will start participating in the Reits and InvITs,” he added.

An InvIT is like a mutual fund that enables direct investment of small amounts from individual/institutional investors into infrastructure to earn a small portion of the income as return.

InvITs, notified by Sebi in September 2014, work like mutual funds or real estate investment trusts and can be treated as the modified version of Reits designed to suit the specific circumstances of the infrastructure sector.

A Reit, or real estate investment trust, is a company that owns or finances income-producing real estate assets.

Modelled after mutual funds, Reits provide investors regular income streams, diversification and long-term capital appreciation. Sebi notified it in November 2014.

Mahalingam was speaking at the Reits and InVits institutional investors seminar organised by the industry body CII.

Mahalingam said it can take up to a year for the Reits and InVits markets to become active which is estimated to be worth USD 20-25 billion.

“It may take a few months to a year to see industry more active. Once we cross the evolutionary phase then the development impetus could take it forward faster.” Mahalingam noted that the markets watchdog Sebi has imposed investment caps on teatime investors as it does not want them to invest in a big way in Reits and InVits initially and burn their fingers.

“This is the evolutionary phase and in this phase we need to adopt a very careful phase of experimentation.

However, we will welcome any feedback from the industry and be receptive to the feedbacks,” he said.

He noted that the new investment vehicles would be an important source to attract foreign investments.

At present though domestic institutional investors are allowed to participate in Reits and InVits, there are some grey areas which the regulator is looking to smoothen their participation.

Source : Business Standard 

Bank of Baroda reduces lending rates by up to 75 bps

MUMBAI: State-run Bank of Baroda on Thursday said it has reduced it marginal cost of funds based lending rate (MCLR) by up to 75 basis points across various tenors.

The new rates would be effective from January 7 and will be applicable to all new and renewed borrowal accounts, the bank said in a statement here on Thursday.

The overnight MCLR has been reduced to 8.10 per cent from 8.80 per cent.

One month MCLR has been set at 8.15 per cent while 3 month MCLR has been reduced to 8.20 per cent from 8.95 per cent earlier.

One year MCLR has been reduced by 70 basis points to 8.35 per cent from existing 9.05 per cent.

Three year MCLR has been revised to 8.50 per cent from 9.05 per cent.

Flush with higher deposits, banks have been reducing their MCLRs.

Country's largest lender State Bank of India has reduced its MCLR by 90 basis points or 0.9 per cent across various maturities.

Following SBI, many banks like HDFC Bank, Canara Bank, Union Bank, Kotak Mahindra Bank, among others have reduced their lending rates.

Housing finance companies HDFC, Indiabulls Finance have also cut their home loan rates.

Source : ET Realty 

SECTOR HAILS RATE CUT AND AFFORDABLE HOUSING INCENTIVES

As the final day of the previous calendar year arrived, entire nation was waiting for the late evening when our Honourable Prime Minister Narendra Modi was to address the nation. Since his address on 8th of November last year, when demonetisation of large currency was announced, everyone was under the impression of what new policy might get implemented on the New Year Eve of 2016. During the address, Prime Minister this time announced some New Year gifts for the public that received a cherry on the top when several leading banks in the country slashed its lending rates by almost 0.9 percent or 90 basis points.

Both the news now carry heavy weightage for the realty sector of our country which has high hopes from 2017. “Moving into 2017, it will be the year of affordable housing segment and now especially with the government announcing incentives for this segment’s prospective buyers and banks reducing lending rates, we will now witness more launches of affordable housing projects than any other segment in the realty sector of India”, believes Pradeep Aggarwal, Chairman, Signature Global.

During the address, two new housing schemes were announced citing the fact that there are still millions of people who don't own a property either due to affordability factor or high interest rates which subsequently increases the EMIs. For the urban poor, in 2017, a rebate of 4 percent and 3 percent would be provided on home loans upto Rs. 9 lakhs and Rs. 12 lakhs respectively. Also, for the new housing or extension of housing taken up on 2017, a rebate of 3 percent would be provided on home loans extending upto Rs. 2 lakhs. PM Modi further added that the number of houses being built  for the poor under the Pradhan Mantri Awaas Yojana (PMAY) in rural areas was being increased by 33 percent. “With announcements such as these, we are inching closer towards fulfilling the dream of building 2 crore affordable housing units for the urban poor by 2022. When lending rates are reduced, it allows the market to create fresh demand, and in this case, developers across the country will focus on developing affordable housing units which will be supported by reduced lending rates, and gladly accepted by the buyers”, explains Vikas Bhasin, MD, Saya Group.

Adding further, Kushagr Ansal, Director of Ansal Housing points out that, “Since the affordable housing and housing for all missions have come up, developer lobby across the country has shifted its gears towards developing budget houses majorly. Almost 50,000 units are getting ready to be delivered by 2022 in Gurgaon itself; and across the country, this number is multiplying at the rate of knots. This in the long run will allow the country to meet the demand against the shortage of budget homes and allow everyone to get a roof over their heads.”

Speaking about the announcement of banks reducing the lending rates, Pradeep Aggarwal adds, “Banks reducing the home loan rates by upto 90 basis points is in general a great news for the sector ahead of Union Budget 2017-18. Most of the people begin property purchase planning around the budget period so as to get clarity about their financial year ahead. This in turn will allow demand for housing to increase this year that will help the realty sector to gain momentum. Affordable housing segment will reap out the highest benefits as a result of extra cushion provided by the government’s recent decision.”

Several leading banks in India have cut down tremendously on the lending rates. For instance, State Bank of India (SBI), reduced its marginal cost of funds based lending rates (MCLR). For SBI, the new rates are 8 percent against 8.90 percent for one year loans, 8.10 percent and 8.15 percent respectively for two year and three year maturity. For other few banks, one year MCLR stand at 8.45 percent against 9.15 percent for Punjab National Bank (PNB), 8.65 percent against 9.30 percent for Union Bank of India (UBI) and 9.15 percent against 9.30 percent for IDBI Bank. Consequently, home loan borrowing has also come down drastically, signalling a boost to housing demand for near future. For example, women borrowers of SBI an avail home loan at 8.60 percent and 8.65 percent for others, thereby saving a decent amount on the EMIs.

“With the government’s announcement of rebate on lending rates along with the banks providing rate cut cushion to the public, affordable housing segment is the biggest gainer of all. Citing the example of the lowest rate in the market at present, 8.60 percent; affordable housing prospective buyers will be basically borrowing now at 4.60 percent or 5.60 percent for loans upto Rs. 9 lakhs and Rs. 12 lakhs respectively. EMIs for this category has fallen by almost 40 percent, which will enhance the demand for housing amongst the buyers”, elucidates Dhiraj Jain, Director, Mahagun Group.

“Its just the beginning of a rate cut cycle in India. Banks at present are carrying high volume of liquidity due to the 50 days of demonetisation. It was well forecasted that rate cuts will begin soon. RBI’s next policy review is due in February as well as the Union Budget 2017-18. Hopes are high for more rate cuts in near future which will further ease the pressure off the economy and allow greater spending. This high purchasing power will result in people opting real estate as an avenue for returns as well as residing, as even interest rates on deposits are decreasing, thus making them less lucrative. In a nutshell though, realty sector is on a track of growth well-supplemented by such initiatives”, concludes Rajesh Goyal, Vice President CREDAI-Western U.P. & MD, RG Group.

Soon, one-way relief for commuters on Dwarka Expressway

GURGAON: Huda has decided to fast-track work on the Northern Peripheral Road (NPR), also known as Dwarka Expressway, which has been caught in legal tangles over rehabilitation of displaced people for past several months.

If sources are to be believed, the urban development authority is planning to make at least one lane of the thoroughfare ready for traffic at the earliest.

In October last year, while hearing a petition filed by one of the oustees, the Punjab and Haryana high court had put a stay on distribution of alternative plots among those of the displaced who did not have proper property documents, forcing authorities to stop construction work.

“The stay is only on issuing of allotment letters for alternative plots to oustees whose claim to ownership depended on general power of attorney (GPA) and special power of attorney (SPA). There is no stay on allotment of plots to people who do not come under GPA and SPA categories,” said Huda administrator Yashpal Yadav. Yadav added the delay in rehabilitation of the displaced was the main obstruction before the expressway project.

Finally, after a meeting at the Huda head office last week, Huda officials decided to start work on stretches that were not caught up in the legal tangle.

Yadav said rehabilitating the non-GPA and non-SPA oustees alone would remove a large number of structures, and clear the way for the proposed expressway. “It will help start construction on some portions of the road,” Yadav added.

In the meantime, Huda is also going to file a petition for an early hearing, seeking relief from the high court.

Once the high court vacates the stay, Huda will build the remaining part of the expressway. “Rehabilitation of oustees from Kherki Daula will help connect NPR with NH-8. Work on construction of a railway overbridge at Basai is at an advanced stage,” he added.

In September last year, Satyendra Singh, one of those displaced, had filed a petition in court, alleging that genuine land losers had been denied alternative plots. He also alleged that Huda made some dubious allotments to GPA and SPA holders.

Taking cognisance of the allegations, the high court stayed the allotment of plots and directed Huda to produce all original documents — GPAs/SPAs/sale deeds — on the basis of which plots had been allotted.

Huda responded by claiming that alternative plots were allotted to the displaced in accordance with the final terms of settlement prepared under the high court’s supervision.

According to Huda officials, 269 alternative plots had been allotted to oustees, including around 60 GPA and SPA holders, through lucky draws in July and August of 2016. Most of these dislodged people, who were chosen from a pool of 465 applicants, were from New Palam Vihar, Kherki Daula and Chauma village.

However, during a hearing last month, Huda failed to get any relief from the court, which listed the matter for a March 2017 hearing.

Source: ET Realty

New projects to unclog Ghaziabad roads this year

GHAZIABAD: The new year promises a lot to the city as various infrastructural initiatives launched in the past could see the light of day in 2017. The projects, which are in various stages of completion,are primarily aimed at providing relief to its 34 lakh people from the nagging traffic problems that have become the order of the day.

1. Metro link from Dilshad Garden to New Bus Stand

Over 55% of work is complete and the 9.41km project is expected to be completed by June 2017. There will be eight Metro stations between Dilshad Garden and New Bus Stand. The estimated cost of the project is Rs 2,210 crore. Once completed, the Metro is expected to take the traffic load off the city's roads by more than 50%. "Though there are some issues with funds, we sincerely hope that it will not come in the way of timely completion of the project," said Vijay Kumar Yadav, vice-chairman, Ghaziabad Development Authority.

2. Elevated Road from UP Gate to Raj Nagar Extension

Work in full swing on the 9.3 km six-lane road being built at a cost of Rs 1,147.6 crore. Expected to be completed by April 2017, the project is touted as country's longest elevated road to be built on a single pier. Once complete, the road will reduce the travel time from UP Gate to Raj Nagar Extension to a mere 10 minutes from the nearly 45 minutes now. "More than 73% work is complete and we hope to open the road by April," said Chakresh Jain, executive engineer, GDA.

3. Grade Separator on GT Road

Work is nearing completion for the grade separator at Meerut trisection. Once completed, it is supposed to decongest the busy cross-section which sees merging of traffic from three points. "Being built at a cost of Rs 35 crore, the work on grade separator is almost complete. We hope to commission it by April next year," said Vijay Kumar Yadav.

4. Railway under-bridge near Hindon, Vasundhara

The stretch of road parallel to Hindon river, which connects the city area to trans-Hindon areas of Vasundhara and Indirapuram, is a nightmare for commuters as there is a long traffic jam almost every day. However, by January, a new railway underbridge will open up for traffic. Built at a cost of Rs 30 crore, the RUB has two concrete push boxes of 9 X 4.5 meters just beneath the railway line that will allow traffic from both directions to pass smoothly.

5. Railway under-bridge at Sahibabad railway station

Being built at cost of Rs 28 crore, the railway underbridge at Sahibabad will be commissioned by March 2017. The project will provide relief to hundreds of commuters from delta colonies for whom getting stuck at this section has become a regular affair.

Source: ET Realty 

Key announcements of PM Narendra Modi's new year eve's speech

NEW DELHI: Prime Minister Narendra Modi on Saturday announced that the government would give the rebate of three and four percent on interest rates to the people who seek loans to build their houses in 2017. "To make the people of the middle class and the poor to buy or build their homes, the government has brought to schemes under the Pradhan Mantri Awas Yojana," Modi said in his address to the nation on New Year's Eve. He said a concession of four per cent will be given to those take a loan of up to Rs 9 lakh and three percent on Rs 12 lakh.

The Prime Minister also said that the government would also build 33 per cent more houses in the villages under the Pradhan Mantri Grameen Awas Yojana. Modi also said that those who want to modify their building or houses, would get three per cent concession on loan of upto Rs 2 lakh. 

Here are the key highlights of his speech: 

- Home loans for poor and middle class people upto Rs 9 lakh will get 4 per cent subvention on interest and upto Rs 12 lakh will get 3 per cent subvention. 

- For home loan in villages upto Rs 2 lakh for home renovation, banks will give loan with 3 per cent subvention on interest rate. 

- Banks have been asked to raise cash credit limit to small business to 25 per cent from 20 per cent. 

- All pregnant women will get Rs 6,000 in their bank accounts in an attempt to reduce child and woman mortality. 

- Government to pay interest for 60 days on loans taken by farmers for Rabi season from district cooperative banks and societies. 

- Credit guarantee for small traders to be raised to Rs 2 crore from existing limit of Rs 1 crore. 

- In the next 3 months, 3 crore Kisan credit cards will be converted to RuPay cards which will enable them to buy/sell directly through the card and there will be no need to rush to banks. 

Source : Economics Times