Home loans to become cheaper: FM Minister

The government on Friday announced a slew of measures to ensure that loans for home, vehicles and consumption goods become cheaper and widely available through banking and non-banking finance companies. Addressing the media here, Finance Minister Nirmala Sitharaman also said that banks will pass on RBI rate cut benefits to borrowers through MCLR reduction. She said that banks will launch repo rate and external benchmark-linked loan products that will lead to reduced easy monthly installments for housing, vehicle and other retail loans. The minister also announced additional liquidity support of Rs 20,000 crore to housing finance companies (HFCs) by the National Housing Bank (NHB), thereby increasing the total support to Rs 30,000 crore. The government announced partial credit scheme for purchase of pooled assets of non-banking finance companies and HFCs up to Rs 1 lakh crore to be monitored at highest level in each bank. Prepayment notices issued to NBFCs will be monitored by banks. The minister said that NBFCs will be permitted to use the Aadhaar authenticated bank 'Know Your Customer' (KYC) to avoid repeated processes. The government has decided to make necessary changes in PMLA rules and Aadhaar regulations to ease the lending process. "The Indian Economy is facing challenging times, and there is an urgent need to activate ways and means to push up GDP growth as also create jobs. With this situation as the reference, the Hon’ble Finance Minister Govt. of India, Smt. Nirmala Sitharaman along with senior officials met a delegation from India’s Housing and Infrastructure industry, our proposals seem to have been taken positively. The liquidity crisis and the need for tax rationalization are two major challenges facing India’s real estate and infrastructure industry, and the Hon’ble Finance Minister’s announcements should result in resolution of the challenges, and should go a big way in enabling Indian real estate and infrastructure play its role in enhancing GDP growth as also creating jobs." Niranjan Hiranandani, Founder & MD, Hiranandani Group. “We welcome the announcements from the Finance Minister that addresses the issues to some measures of many industries have been facing slowdown for the past few months. These will help in confidence building, especially for segments like auto and MSMEs and even real estate. For the real estate sector specifically, the alignment of the bank lending rates to the REPO rate will have significant impact. This has been a long standing demand for banks to pass on the benefits of lowering REPO rates. We are looking forward to the announcements that the Finance Minister shortly announcements directly impacting the real estate sector.” shared Shishir Baijal, Chairman & Managing Director, Knight Frank India.