EMI at PoS through credit cards gaining momentum

Remember ‘0% EMI’ schemes? Banks made money, manufacturers and merchants exhausted their inventory and consumers spent with gay abandon (for electronic goods and household items) until RBI played the party pooper. Although 0% EMI schemes were discontinued after RBI ban, the importance of the potent combination of ‘convenient credit’ coupled with flexible payment options, was… Continue Reading

Banks must link disbursal of housing loans to construction stages: RBI

Taking serious note of borrower un-friendly home loan schemes introduced by banks in association with developers/builders, RBI has advised banks to refrain from making upfront disbursal of home loans to the builders without linking the disbursal to various construction stages of housing project. These subvention schemes, popularly known as 80:20 or 75:25 schemes, had gathered… Continue Reading

RBI rate cut – Will it help the borrowers?

The Reserve Bank of India has cut the repo rate by a sharp 50 basis point. Repo rate is the rate at which the RBI lends money to banks. It means the borrowing from RBI becomes cheaper for commercial banks. The reduction in repo rate has come for the first time in last 3 years.… Continue Reading

SBI and ICICI Bank end pre-payment penalty on home loans

A few weeks ago, NHB had banned prepayment penalty on floating rate home loans by HFCs such as HDFC and LIC Housing Finance. Just like we had predicted earlier, banks are now following suit in abolishing prepayment penalty on home loans. SBI and ICICI Bank have now joined the HFCs and Axis Bank in ending… Continue Reading

Cap for 1% interest subsidy raised – Should we cheer?

Recently, Union Cabinet has decided to increase the cap for availing 1% subsidy on home loans. For poor and middle class people to whom owning a house is a big dream, it will be a relief as it will partially compensate for the ever increasing interest rates. The subsidy would now be available for home… Continue Reading

NHB bans prepayment penalty on home loans by HFCs

In a major relief to debt burdened and EMI paying borrowers, regulator National Housing Bank (NHB) directed housing finance companies (HFCs) not to levy penalty on prepayment of floating loans irrespective of the source of funds. However, borrowers with fixed rate loans can avoid prepayment penalties only if they pay from their own sources. According… Continue Reading