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Banking & Financial Services - Sector
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Residential sector in India has witnessed a slowdown following a spurt in property prices and spiralling interest rates on home loans by about five per cent in last four years, an ASSOCHAM study said.
"With the repricing of interest rates in the last four years from 7 per cent to 12 per cent and the sky rocketing prices of the property, there has been a slowdown in the residential property market," it said in a paper on Realty Check.
Expressing concern over increasing role of speculators in the real estate sector, ASSOCHAM said: "It is necessary to check the flow of speculative money."
Commenting on the home loan GDP ratio, ASSOCHAM said this ratio is stagnated between five to six per cent in the country as 90 per cent Indian borrowers are first timers, while in the US and UK the ratio was as high as 50 per cent.
High interest rates coupled with soaring property prices have only impacted the affordability of buyers, demand, however, continues to persist and would become stronger and more intense in near future, ASSOCHAM President Sajjan Jindal said.
India has a shortage of about 19.4 million housing units of which 6.7 million is estimated for urban India. It is estimated that additional 45 million units would be required for both rural and urban areas by 2012, it said.
"All these estimates work out to make a strong case for higher home loan GDP ratio so that India and its population is able to keep a pace for meeting the demand for housing units," Jindal said.
The study said the share of housing loans in total personal loans have increased from 37.2 per cent in 2001-02 to over 51 per cent in 2006-07. Home loans constituted 54 per cent in the total household credit in the year ended March, 2007. ...
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Bankex makes the most of market rebound
Just two out of the 12 sectoral indices on BSE outperformed the Sensex in early afternon trade.
At 11:55 IST, the BSE Sensex was up 444.75 points or 3.17% at 14,493.09.
BSE\'s banking sector index Bankex outperformed the Sensex, rising 5.91% at 6,986.08.
The BSE Realty index outperformed the Sensex, rising 4% at 4,943.10.
Banking and realty shares were in demand after data showing softening of inflation boosted hopes of central bank keeping key lending rates unchanged in its next monetary review. The annual wholesale price index-based inflation rose 12.40% for the week ended August 16, lower than the 12.63% the previous week. Inflation was at 3.99% during the corresponding week a year ago.
The BSE Capital Goods index, underperformed the Sensex, gaining 3.03% at 11,841.02.
The BSE PSU index, underperformed the Sensex, gaining 2.83% at 6,692.45.
The BSE Power index, underperformed the Sensex, gaining 2.69% at 2,584.04.
The BSE Metal index, underperformed the Sensex, gaining 2.64% at 12,239.92.
The BSE Oil & Gas index, underperformed the Sensex, gaining 2.28% at 9,622.28.
The BSE IT index, underperformed the Sensex, gaining 1.97% at 3,929.45.
The BSE Auto index, underperformed the Sensex, gaining 1.89% at 3,985.49.
The BSE Consumer Durables index, underperformed the Sensex, gaining 1.73% at 3,813.69.
-courtesy CM...
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Blb is hovering around 17 level but it is likely to come down in the near future and may start quoting below 10. The target is 8 in the medium term...
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BANKING: Government is yet to decide on paying interest on the outstanding
amount owed to banks under the 720-bln-rupee farm loan waiver scheme. (NW18)
Reserve Bank of India\'s data showed FY09 bank credit growth until Aug 15
robust at 26%. (NW18)
Government says all regional rural banks to turn profitable by March. (NW18)
Standard Chartered to raise UTI Securities\' stake to 74%. (BS)
Life Insurance Corp may get to retain over 10% in blue chip companies. (ET)
Standard Chartered to scale down personal loans business. (ET)
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Good points.
In case there is a huge difference between the home loan rates for existing and new customers. ideally the existing customer should be able to go to a new bank and refinance his loan. Unfortunately, your existing bank will levy a significant percentage in processing fees so that any incentive you had in moving to another bank gets taken out. This is another unfair trade practice but our govt. is in a deep slumber. Be it Real estate, finance and banking, public infra, substandard IPOs - the govt. is just letting the free for all go on. When will they wake up to serve the citizens who elected them and not the corporates who fund them....
In reply to:
6 things your bank will never tell you...
Posted by :
latikav
We are here to do business, not serve you
Most of your neighbourhood banks today claim to have evolved from being a mere caretaker of funds to serving a wide spectrum of customers' needs.
And, in a sense, they have -- to some extent. This is also visible from the availability of a wide range of products and services, their way to conduct business and the urge to ‘serve’ you (need a personal loan, sir/madam?).
However, while most of the banks today keep boasting of the new age banking as well as their so-called ‘innovative’ and ‘improved’ services, they seldom tell their customers that what all they are doing is more to make money and in view of increased competition and as a survival strategy, than either to 'serve' them or create greater 'customer value'.
There are no free lunches
As a customer, you might be revered by today’s banks as both ‘god’ and ‘king’ , but only on paper.
In actual life, you can remain a ‘valued’ customer only till you are able to foot the rising bills of these ‘new age’ banks, and not the other way round.
Forget other things, you can’t even open a savings account with them unless you are able to meet their criteria and can also maintain the desired minimum balance which in most cases is not less than Rs 10,000.
Also, you can’t be sure when their banking charges will go up again. This is true not only during the days of rising interests, but otherwise also.
Worse, just delay some payments and all the bank’s ‘cordial relationship’ with you will go up in smoke in seconds.
We take our existing customers for granted
You are a valued customer only till you have not availed the services of a bank or till the bank is hoping to gain from you in some way or the other.
However, most banks do start taking you for granted the moment you become their customer.
For instance, while housing finance companies keep luring prospective customers with new schemes and low interest rates, they refuse to extend the same benefit to their existing customers.
To take an example, following the recent CRR and repo rate hikes, ICICI Bank increased its floating home loan interest rate to 12.25 per cent and the fixed rate to 14.75 per cent.
As a fair practice, the new floating rate of 12.25 per cent (which was exorbitant in any case) should have been applicable to both the new as well as existing customers. But surprisingly, the bank hiked the floating rate up to 14 per cent in the case of their existing customers and that too without making it public!
'Grace period' is valid only if your current card balance is zero
One of the reasons of exorbitant interests on credit cards (up to 50 per cent) is said to be the interest-free period of more than one month on credit card transactions.
However, surprisingly, the so-called 'grace period' of 50 or whatever days on credit card retail transactions are valid only if there are no outstandings on the card.
In other words, if your current balance is zero. However, if you are already revolving, then all fresh purchases will attract interest from the date of purchase itself.
Also, 'grace period' is valid only for retail transactions. Cash transactions in all cases attract an interest charge form the date of transaction till the date of settlement. Besides, they also attract a transaction fee and applicable service charges.
You can't pre-close personal loans before six months
Have taken a personal loan recently or are planning to take a new one? You should first be aware that under no circumstances you can pre-close your personal loan before six months of taking it.
That means that if you have got a sudden windfall or are taking a housing loan from another bank and the bank tells you to clear your personal loan first, you can do it only after six months of taking the loan.
You can’s pre-close the loan even if you agree to pay the EMIs of the first six months instantly apart from pre-closing charges.
The bank will simply refuge to process you case. This is true with most of the banks, including HDFC Bank.
We care a fig for the law of the land
You may have due respect for the law of the land, but that doesn’t mean that all the banks and financial institutions should also necessarily feel the same way. This explains why most of them keep saying something, while they do something else.
For instance, even after the National Consumer Disputes Redressal Commission ruling that charging of interest at rates in excess of 30 per cent per annum is an unfair trade practice, most of the credit card companies have hiked their rates up to 50 per cent and are still looking for more such hikes, citing one reason or another.
Similarly, these banks are yet to follow the RBI norms on recovery of dues, among others. No wonder, the investigative arm of the Monopolies and Restrictive Trade Practices (MRTP) Commission had some time back recommended action against both Citibank and HSBC for allegedly making false promises to their credit card customers and violating RBI guidelines.
As per the Director General of Investigation and Registration (DGIR) report, these two banks had allegedly delayed delivery of bills and realisation of cheques toward payment just to charge increased interest rate and late fee.
Surprisingly, however, most of the banks are yet to learn any lesson from such incidents and keep doing the same thing. So, the courts make keep ruling against unfair trade practices. But who cares?
(The Economic Times) 
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We are here to do business, not serve you
Most of your neighbourhood banks today claim to have evolved from being a mere caretaker of funds to serving a wide spectrum of customers' needs.
And, in a sense, they have -- to some extent. This is also visible from the availability of a wide range of products and services, their way to conduct business and the urge to ‘serve’ you (need a personal loan, sir/madam?).
However, while most of the banks today keep boasting of the new age banking as well as their so-called ‘innovative’ and ‘improved’ services, they seldom tell their customers that what all they are doing is more to make money and in view of increased competition and as a survival strategy, than either to 'serve' them or create greater 'customer value'.
There are no free lunches
As a customer, you might be revered by today’s banks as both ‘god’ and ‘king’ , but only on paper.
In actual life, you can remain a ‘valued’ customer only till you are able to foot the rising bills of these ‘new age’ banks, and not the other way round.
Forget other things, you can’t even open a savings account with them unless you are able to meet their criteria and can also maintain the desired minimum balance which in most cases is not less than Rs 10,000.
Also, you can’t be sure when their banking charges will go up again. This is true not only during the days of rising interests, but otherwise also.
Worse, just delay some payments and all the bank’s ‘cordial relationship’ with you will go up in smoke in seconds.
We take our existing customers for granted
You are a valued customer only till you have not availed the services of a bank or till the bank is hoping to gain from you in some way or the other.
However, most banks do start taking you for granted the moment you become their customer.
For instance, while housing finance companies keep luring prospective customers with new schemes and low interest rates, they refuse to extend the same benefit to their existing customers.
To take an example, following the recent CRR and repo rate hikes, ICICI Bank increased its floating home loan interest rate to 12.25 per cent and the fixed rate to 14.75 per cent.
As a fair practice, the new floating rate of 12.25 per cent (which was exorbitant in any case) should have been applicable to both the new as well as existing customers. But surprisingly, the bank hiked the floating rate up to 14 per cent in the case of their existing customers and that too without making it public!
'Grace period' is valid only if your current card balance is zero
One of the reasons of exorbitant interests on credit cards (up to 50 per cent) is said to be the interest-free period of more than one month on credit card transactions.
However, surprisingly, the so-called 'grace period' of 50 or whatever days on credit card retail transactions are valid only if there are no outstandings on the card.
In other words, if your current balance is zero. However, if you are already revolving, then all fresh purchases will attract interest from the date of purchase itself.
Also, 'grace period' is valid only for retail transactions. Cash transactions in all cases attract an interest charge form the date of transaction till the date of settlement. Besides, they also attract a transaction fee and applicable service charges.
You can't pre-close personal loans before six months
Have taken a personal loan recently or are planning to take a new one? You should first be aware that under no circumstances you can pre-close your personal loan before six months of taking it.
That means that if you have got a sudden windfall or are taking a housing loan from another bank and the bank tells you to clear your personal loan first, you can do it only after six months of taking the loan.
You can’s pre-close the loan even if you agree to pay the EMIs of the first six months instantly apart from pre-closing charges.
The bank will simply refuge to process you case. This is true with most of the banks, including HDFC Bank.
We care a fig for the law of the land
You may have due respect for the law of the land, but that doesn’t mean that all the banks and financial institutions should also necessarily feel the same way. This explains why most of them keep saying something, while they do something else.
For instance, even after the National Consumer Disputes Redressal Commission ruling that charging of interest at rates in excess of 30 per cent per annum is an unfair trade practice, most of the credit card companies have hiked their rates up to 50 per cent and are still looking for more such hikes, citing one reason or another.
Similarly, these banks are yet to follow the RBI norms on recovery of dues, among others. No wonder, the investigative arm of the Monopolies and Restrictive Trade Practices (MRTP) Commission had some time back recommended action against both Citibank and HSBC for allegedly making false promises to their credit card customers and violating RBI guidelines.
As per the Director General of Investigation and Registration (DGIR) report, these two banks had allegedly delayed delivery of bills and realisation of cheques toward payment just to charge increased interest rate and late fee.
Surprisingly, however, most of the banks are yet to learn any lesson from such incidents and keep doing the same thing. So, the courts make keep ruling against unfair trade practices. But who cares?
(The Economic Times)...
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Axis Bank launched a PE fund through arm, Axis Private Equity.
SBI, ICICI Bank plan to cater to the SME sector.
Yes Bank also plans to launch 2-3 PE funds in next one year.
...
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Banks must play a more pro-active role in finding the whereabouts of account holders whose accounts have remained inoperative and must also continue to pay the interest on such deposits, said the Reserve Bank of India in a notice issued on Friday.
-BS
RBI has issued these instructions in view of the increase in the amount of unclaimed deposits with banks and the inherent risk associated with such deposits. “Interest on savings bank accounts should be credited on a regular basis whether the account is operative or not. If a fixed deposit receipt matures and proceeds are unpaid, the amount left unclaimed with the bank will attract savings bank rate of interest,” said RBI in its note issue.
A savings as well as current account should be treated as inoperative or dormant if there are no transactions, either credit or debit, for over a period of two years. However, the service charges levied by the bank or interest credited by the bank should not be considered.
The RBI said that banks must make an annual review of such accounts and inform the customers of the same. They can also ask customers for reasons why the account remains inoperative.
In case the account holder gives a reply for not operating the account, banks should continue classifying the account as an operative account for one more year. However, if the customer still does not operate the account during the extended period, banks should classify the account as inoperative after the expiry of the extended period.
There should no charge for activation of inoperative account. If customers have shifted from the locality, then banks can ask for details of their new bank accounts to which the balance in the existing account may be transferred.
Avoiding inconvenience
The RBI also clarified that while the segregation of the inoperative accounts is from the point of view of reducing the risk of frauds, customers should not be inconvenienced in any way. “The classification is there only to bring to the attention of dealing staff, the increased risk in the account. The transaction may be monitored at a higher level both from the point of view of preventing fraud and making a Suspicious Transactions Report. However, the entire process should remain un-noticeable by the customer,” the RBI said.
In case of unclaimed deposits, banks wait for as long as 10-20 years for the deposit holder or some legal heir to claim the amount, said a senior bank official with a leading public sector bank.
Tracing deposit holders
The bank periodically takes steps to trace the deposit holders. If the amount is small, the bank may issue a few reminders and leave it at that. But if the amount is huge, the bank takes serious efforts to trace the deposit holders.
“Only if it is really not possible to track the deposit holder, is the money given to the Government, as then it belongs to the Government. But usually that does not happen. During the period, some legal heir or the deposit holders themselves come forward to claim the amount,” the official said.
...
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After six months, India’s foreign exchange (forex) reserves have dropped below the $300-billion mark.
During the week ended August 15, forex reserves fell by $3.8 billion to $296.21 billion mainly on account of an appreciation of the dollar against other currencies. Foreign exchange reserves went above the $300-billion mark in February this year and touched an all-time high of $316.17 billion in the week ended May 23.
Reserves have, however, declined for the last six weeks. Even during the previous week, foreign exchange reserves fell by $5.6 billion and the decrease was attributed to selling by foreign institutional investors due to volatility in the Indian stock markets.
The latest figures from the Reserve Bank of India (RBI) showed that the country’s foreign currency assets declined by $3.7 billion to $285.98 billion
-BS
...
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RBI says three states to raise 20.596 bln rupee via 10-yr bond Tue
Three states will sell 10-year bonds through yield-based auction for
total of 20.596 bln rupees on Aug 26, the Reserve Bank of India said today.
...
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RBI says three states to raise 20.596 bln rupee via 10-yr bond Tue
Three states will sell 10-year bonds through yield-based auction for
total of 20.596 bln rupees on Aug 26, the Reserve Bank of India said today.
...
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* DAILY LAF TENDERS: 1-day reverse repo (at 6%) and 1-day repo (at 9%).
Bids for the tender may be submitted 9AM-10:30AM today.
* PD UNDERWRITING: 15-25 paise primary dealers\' underwriting cut-off fee seen for 60-bln-rupee auction of 8.24%, 2027 bond.
...
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Private sector lender IndusInd Bank said on Wednesday it has closed microfinance receivables worth 1 billion rupees.
It was part of the 1.5 billion rupees worth of microfinance receivables which the bank has been assigned, it said in a statement.
The balance is expected to be concluded in February, the statement said adding the transaction was structured and arranged by Grameen Capital India and comprised a pool of advances to the farm and allied sectors.
- TFE
...
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The rupee fell to its lowest level against the US dollar in 17 months on Wednesday, weighed down by worries of capital outflow due to recent losses in the stock markets.
...
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Interest rates may go up further as the inflationary pressure is refusing to cool down, despite all the measures taken by government and RBI, feel market players. On Tuesday, global merchant banker Lehman Brothers said in a report that inflation is expected to rise more to touch 14% by October-November.
...
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