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Bring 25% of Loan Amount and Get Low Interest Rate
| May 2, 2007 |    (2 votes, average: 2.5 out of 5) Loading ... |
The coming years may bring different home loan rates depending upon the money a borrower can bring to the table. The new guidelines are likely to be effective from March 2009.
The new guidelines were issued on April 27 and are final for banks functioning in India to comply with the rules and regulations of Basel II, the second of the Basel Accords, which are recommendations on banking laws issued by the Basel Committee on banking Supervision.
Indian banks have given the extra period of a year to confirm the norms whereas the foreign banks have March 2008 to fall in time. The norms have come up with different risk weightage for different kinds of loans available with banks. As for the home loans in India, the risk weightage for the loan below Rs 20 lakh will be 50 per cent and for higher loan amount, it would go up to 75 per cent.
In case, the loan amount exceeds 75 per cent of the value of the asset, the price of the house being bought – the risk weight will be 100 per cent irrespective of whether the loan is below or above Rs 20 lakh.
The Basel II norms are followed by all the countries. Also, it is necessary for them to comply with the rules to become globally competitive. However, modifications can be done in the norms depending upon the domestic situation as well as changes in global practices.
News Published Under: Home Loans |
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