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Finance: Gearing up to ride boom
Updated: February 24, 2005 08:37 IST
Indian financial institutions (FIs) are fast getting their act together to counter stiff competition from the banking entities. They are also gearing up to transform themselves into 'Universal Banks', to capitalize on the opportunities available in the sector with the opening up of the Indian economy.
While some of the major banks are also now catering to demand for long-term and project finance, FIs remain the conventional sources of the same. With most FIs being converted to banks (ICICI, IDBI and the like), the term FI has now remained restricted to NBFCs and HFCs.
Industry Wish List
Maintain the tax incentives on housing loans.
Housing finance companies (HFCs) are seeking level playing field after the aggressive entry of banks into the sector. This is due to the fact that HFCs are not allowed tax exemptions against provision for non-performing assets (NPAs) unlike banks and financial institutions.
Budget over the years
Budget 2002-03
Budget 2003-04
Budget 2004-05
Deduction for interest payable on housing loans for self-occupied houses even where such houses are acquired or constructed after March 31, 2003.
Capital gains exemption is provided in section 54EC of the Income-tax
Act to bonds issued by the National Housing Bank.
The NHB will launch a Mortgage Credit Guarantee Scheme.
Tax exemption on interest on housing loans maintained at Rs 150,000 per year.
Tax breaks on specified housing projects have been extended till 2005.
Reduction in the interest rates on all small savings schemes by 1%.
The government has stressed on the rural housing sector and has raised the allocation for Indira Awas Yojana by Rs 5.3 bn to Rs 22.5 bn.
RBI to revise the norms of repayment of rural housing loans by banks so that installments coincide with crop cycles.
Tax exemption on interest on housing loans maintained at Rs 150,000 per year.
