You can't ask a current borrower to finance your growth, says RBI memeber Yezdi H Malegam.
Many customers have had to deal with printouts saying 'transaction declined.' Customers using their own banks' ATMs did not, however, face similar problems. Transactions on a bank's home ATM network are processed through a different switching system, while inter-bank transactions go to NFS, the country's largest domestic network for authentication and routing payment details of various e-commerce transactions and e-government activities.
To discuss ways of increasing lending to optimise stimulus package impact.
With interest rates softening, banks are slowly re-pricing the cost of short-term credit extended to the corporate sector.
"This is for the first time that a manufacturer will charge for an application form. However, it will be refunded if an application is rejected," said a senior bank executive. Bookings are expected to start by the last week of March. The forms will be collected through various channels. "All the forms and the collected money will be transferred to SBI, where they will be processed, and loans will be given through various banks within 90 days," said a source.
Leading economists on Friday called for more fiscal measures to sustain the Indian growth story.
Banks are now asking developers to lower prices to clear their piled-up inventory. In fact, clearing of inventories is a key pre-condition for loan restructuring when the realtors approach lenders, executives at various banks said. Public sector banks, in particular, are asking the builders to justify the offer price of projects as there are apprehensions that real estate companies are holding on to stocks after the payment of instalments is rescheduled.
With the restructuring process in full swing, public sector banks have stepped-up monitoring to keep non-performing assets (NPAs) at desired levels.
Weighed down by mounting outstandings and non-performing assets (NPAs), credit card companies are taking strong measures that include slashing new card issuances and credit limits for existing customers.
The government was keen that HFCs did not use the special window at a low rate and offered loans at very high rates. On 5 December, the Reserve Bank of India announced a refinance window for the HFCs, under which Rs 4,000 crore was made available to them from NHB at a concessional rate of 8 per cent.
Public sector banks are increasingly looking at promoter funding as a business opportunity when others are shying away from it.
Ahead of acting finance minister Pranab Mukherjee's meeting with public sector bank chiefs on Monday, the government has asked state-owned lenders to submit data on home loans sanctioned by them since December 15.
In a possible precursor to further rate cuts, Finance Minister Pranab Mukherjee's meeting with public sector bank chiefs on Monday will review their benchmark prime lending rates and interest rates on loans for automobiles, homes, small and medium enterprises and non-banking finance companies.
The government has extended the repayment date six months under the farm loan waiver scheme, a move that is expected to help banks set aside less money for non-performing loans, but has raised expectations of another loan waiver ahead of general elections.
The move is aimed at helping them reduce the interest rate on loans for purchase of commercial vehicles and free up additional capital to meet the higher capital adequacy ratio requirement. Non-banking finance companies have to maintain a capital adequacy ratio of 12 per cent, which is to go up to 15 per cent from April, 2010.
With public sector banks reducing interest rates on home loans up to Rs 20 lakh (Rs 2 million), housing finance companies (HFCs) might be under pressure to follow suit in order to stay competitive.
Say cost of funds too high to lower lending rates.
At a time when the global banking industry is feeling the pinch of the global credit crunch, Central Bank of India is planning to expand its foreign presence.
Even though the Reserve Bank of India (RBI) has reduced the risk weightage on loans to commercial developers and cut general provisioning for commercial real estate, commercial banks may not start lending to the sector immediately.
At this time of fear and apprehension over jobs, public sector banks are swimming against the tide to go on a hiring spree.
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