Yes, we can! RBI must move immediately to ensure banks charge logical rates
While the RBI might succeed in demotivating new home buyers from taking loans, the past home buyers would slowly be pushed to the brink of defaulting, if not insolvency.
As per a recent study by CRISIL, the share of bad loans to total loans in banks, which was 2.3% in 2009 is likely to swell up to 4% in 2010; the same is further expected to rise to 5% in 2011. The final effect will be both economical (As per May, 2010 figures, total bank loans equalled Rs.305,325 crores) and psychological (as asset demand would crash).
The solution? Delink home loan rates from other base rates. Force banks to ensure that each home loan’s base rate remains at the original cost at which the bank procured the money (to then give it to the home loan customer). By arbitrarily increasing home loan rates across even old loans, banks are doing their mite to destabilise the economic situation. An RBI move is required right now.
As per a recent study by CRISIL, the share of bad loans to total loans in banks, which was 2.3% in 2009 is likely to swell up to 4% in 2010; the same is further expected to rise to 5% in 2011. The final effect will be both economical (As per May, 2010 figures, total bank loans equalled Rs.305,325 crores) and psychological (as asset demand would crash).
The solution? Delink home loan rates from other base rates. Force banks to ensure that each home loan’s base rate remains at the original cost at which the bank procured the money (to then give it to the home loan customer). By arbitrarily increasing home loan rates across even old loans, banks are doing their mite to destabilise the economic situation. An RBI move is required right now.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri's Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM's Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
