Budget for women and children welfare increased from Rs 1,56,528 crores to Rs 1,84,632 crores for 2017-18
'In the short-term, the markets may be affected' by the review but 'it will help address what they are worried about which is why we need transparency,' says former chief economic advisor.
Observing that MSME sector plays an important role in the growth of the Indian economy, RBI said the restructuring of the borrower account has been extended by further one year to March 31, 2021.
After the NHB asked housing finance cos to desist from offering interest subvention schemes, disbursement of loans are likely to get delayed, points out Tinesh Bhasin.
RBI would alert banks to exercise caution on their exposure to the real estate sector according to the process usually followed, sources said.
In his Budget speech, the finance minister said: "We propose to facilitate higher investment in affordable housing. Affordable housing will now be given infrastructure status, which will enable these projects to avail the associated benefits."
After banks, it's the turn of housing finance companies to have a more transparent regime for pricing of loans. The National Housing Bank (NHB), the regulator for these companies, is working on a system that is similar to the base rate regime introduced for banks recently.
Mumbai and Delhi NCR, country's two largest markets, do not fare very well.
The government and Reserve Bank of India are working on opening a massive Rs 75,000 crore refinance window to provide concessional funds for infrastructure, housing and small and medium enterprises by partly leveraging the country's foreign exchange reserves.
Housing finance companies are currently regulated by NHB, which is, in turn, regulated by RBI. NHB is wholly-owned by RBI.
'Real estate loans are given in the garb of retail loans, sourcing money cheap from the NHB refinance window.' 'This loophole is being plugged,' notes Tamal Bandyopadhyay.
Reserve Bank of India Governor Shaktikanta Das on Friday said the central bank will ensure adequate liquidity in the system to ease the financial stress caused by the Covid-19 pandemic. The central bank reduced the reverse repo rate -- the rate at which banks park their fund with the central bank -- by 25 basis points to 3.75 per cent.
Through NHB, the government has made available additional funds to the tune of Rs 60 billion to the housing finance sector. The bank is clearing oversees borrowing applications from housing finance firms to boost their funding requirements. NHB chairman and managing director S Sridhar shares his views on the current scenario.
But their plea for fresh measures to boost their liquidity has not found favour with the National Housing Bank, which assessed their fund requirement in the last week of December. Sources at NHB said the measures initiated by the Reserve Bank of India appeared sufficient for the requirements.
Most borrowers may not be aware, but quite a few banks already offer external benchmark linked home loans to favoured borrowers, says Harsh Roongta.
"We are already restructuring viable accounts, which are facing temporary cash flow problems," says S Sridhar, Chairman & MD, Central Bank of India.
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.
The Reserve Bank of India (RBI) has permitted housing finance companies (HFCs) to raise up to $10 million through short-term foreign currency loans, like non-bank finance companies (NBFCs).
State Bank of India alone has extended a majority of the 1,900 loans. The National Housing Bank, which developed the scheme that is meant for people aged above 55 years, feels that the poor show is due to the lack of awareness among senior citizens, who number stands at 76 million according to the 2001 census data, and lack of enthusiasm on the part of the banks.
The loan is given without any income criteria at an age where normal loans are not available.
The new rate will be effective from December 8. The primary liquidity made available to the system through these measures is worth over Rs 3,00,000 crore (Rs 3,000 billion), RBI Governor D Subbarao said in Mumbai.
National Housing Bank, the refinancing and regulatory authority of housing finance companies in India, is of the opinion that reverse mortgage would fall under the tax bracket unless the government clarifies on exempting reverse mortgage.
The data is expected to form the basis for policy decisions such as rationalising stamp duty, capital gains tax, municipal tax and determining mortgage rates.
A nation-wide housing price index may be a reality soon. The National Housing Bank, in collaboration with the National Council of Applied Economic Research, is close to finalising the methodology to be adopted for the index, named NHB Residex.
The Insurance Regulatory and Development Authority (Irda) has constituted a seven-member committee on health insurance for senior citizens.
Bangalore saw realty prices rise 28.8 per cent every year between 2001 and 2005, according to data from National Housing Bank. The Housing Price Index of Bangalore went up nearly 175 points in the period, the highest among the Indian cities. The index has been provided by the NHB's technical advisory group on a pilot basis.
Housing finance regulator National Housing Bank will announce the guidelines for 'reverse mortgage' next month. This would allow senior citizens who own houses to have a regular stream of income for 15 years.
CII suggested the policy measures required to ease the tight liquidity situation by cutting CRR by at least 50 basis points.
Expressing his satisfaction over the government's move to slash fiscal deficit target, Das said it will help improve investment by the private sector as crowding out impact will be less.
Amid slowdown blues, the government has unveiled a raft of measures over the past few months aimed at improving liquidity in the system, moderating interest rates as well as credit growth apart from addressing stress in the NBFC sector.
Asset Reconstruction Company has acquired bad debts totalling Rs 805 crore (Rs 8.05 billion) from ICICI Bank and National Housing Bank (NHB) and is close to finalising 2-3 more deals including public sector lenders, a top ARCIL official said.
The average age of person/s having own residential homes has come down from 42 in 2000-01 to 31 years in 2006-07? Do you know how this has become possible. Tax sops on home loans is the biggest catalyst to begin with.
LIC Housing Finance on Thursday announced it will launch reverse mortgage schemes for senior citizens in a couple of months.
The National Housing Bank plans to allow senior citizens to mortgage their residential property to a bank or a housing finance company while retaining the right to stay, with an aim to providing a steady income to them.
The National Housing Bank has launched a new scheme called the reverse mortgage through which you can get the money for your home that too without selling it.
'The no-rate cut policy and preference to wait for the Budget and clarity on the fiscal front demonstrate RBI Governor Shaktikanta Das is maturing in his new role,' notes Tamal Bandyopadhyay.
Fitch expected inventory turnover to improve on a sector-wide basis.
The RBI has this year cut interest rates by 110 basis points in four instalments but banks have passed only a part of it to borrowers. Before the last reduction earlier this month of 35 basis points, the bank on an average had passed only 29 basis points out of 75 basis points cut affected during 2019.
In what could bring down home loan rates, the Employees Provident Fund board is toying with the idea of investing in mortgage-backed securities as part of its multi-pronged strategy to raise returns on its assets.
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