No Soaring Interest Rates on Home Loans, Expect Bankers

June 18, 2007	(Be the first to rate this story!)  Loading ...
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Bankers eliminate the requirement of any further hike in interest rates on home loans since rate of growth of credit seems to be undergoing corrections in these sectors.

The government is taking stringent steps to control soaring demand in real estate market and housings sectors, banks are trying to follow the existing directives to contain growth of credit in the housing sector, says K Raghuraman, executive director of Punjab National Bank.

Industry analysts too share the same view with bankers not to increase rates in housing sector. The bankers’ move follows the statement by finance minister P. Chidambaram on June 12 regarding the government’s intention to cut demand in home loan as well as booming property market.

In case any moderations in external environment push up the inflation, it may increase interest rates again.

The wholesale prices band inflation dropped for the seventh week in a row to 4.80% during the week ended on June 2. However, interest rates have been showing stabilization currently. But there may result a marginal increase after two to three months. Investors were no longer showing active participation and there seem to be no trend prevailing to borrow money for buying third or fourth house, says Deepak Parekh, chairman of HDFC Bank.

On the other hand, ICICI, India’s largest private sector bank has other reasons to expect stabilization phase for interest rates on home loans following the factors such as low inflation and high liquidity in the market.

News Published Under:   Home Loans |

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