FM's rate cut call may fall in deaf ears

New Delhi, March 10 Even as Phosphorus Chidambaram urging Banks to cut down involvement rates on place loans of up to Rs 20 lakh, the phone call from the finance curate may fall on deaf ears. Many bankers experience even the current low involvement rates have got not resulted in an addition in recognition growing in that category. Bankers and analysts experience only a rectification in place terms can excite the demand for loan.

During his post-Budget interaction with industry chamber Assocham last week, the curate had said, "I shall certainly bear in head that there is public demand that involvement rates for borrowers, who borrow (housing loans) up to Rs 20 lakh, must be lowered. I made a figure of attempts to affect upon bankers in this respect ... it is a changeless attempt that I will have got got got got got to make... bankers will have to take a call, run batted in will have to take a call."

As much as 80% of all lodging loans autumn in the class of below Rs 20 lakh, Chidambaram said, adding that these loans have less hazard weight than those above Rs 20 hundred thousands and, therefore, bankers have inducements to impart to these borrowers at less involvement rates.

However, Punjab National Depository Financial Institution and Union Depository Financial Institution of Republic Of India are not looking at falling in line with Chidambaram's demands.

PNB president kilohertz Chakraborty said "With a place loan charge per unit of 9-9.5%, we are offering one of the last rates in this category. But still we are not seeing any addition inch recognition off-take in the place loan category. This shows that what people necessitate is not inexpensive place loans. In most places, place terms have got gone beyond the range of the common man".

The size of the place loans portfolio of PNB and Union Depository Financial Institution is around Rs 7,000-8,000 crore each.

Harsh Roongta, CEO, Apnaloan.com said: "Since there is an addition in place loan involvement rates as well as place prices, many people are now finding the rental option more attractive. We necessitate additional rectification in involvement and place rates to see a rise in demand. But, Banks are not showing much appetency for giving more than place loans".

However, there are bankers who believe otherwise. "I don't believe it is as unreasonable a demand as it is made out to be. It would interpret into volume growth," said a senior banker, requesting anonymity. There were studies that Kolkata-based Uco Depository Financial Institution was considering a additional 0.5%...