RBI raises Cash Reserve Ratio, But Home Loan Rates Stay
April 30, 2008 by Editor
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The Reserve Bank of India (RBI) has hiked the cash reserve ratio (CRR)- the portion of deposits banks have to keep with the RBI-to squeeze money supply and arrest inflation, which has touched 7.33 percent.
The Reserve Bank of India Governor Y.V. Reddy, in the credit policy announced on Tuesday, raised the cash reserve ratio by 0.25 percent to 8.25 percent, the second hike in 12 days.
But the good news for home loan customers is that interest rates are expected to remain stable for now.
Also, the Reserve Bank of India has relaxed lending norms, laying the ground for banks to give more home loans in the lower and middle class segment.
So far, loans of up to Rs. 20 lakh would have to be secured by the bank setting aside 50 percent of the amount. Now, banks can give up to Rs. 30 lakh without a rise in the security amount.
This may even marginally lower rates on loans up to Rs. 30 lakh. “We expect banks to pass on the benefit. It should result in considerable relief to borrowers,” said Reddy.
Bankers are monitoring the situation closely. “Interest rates are a function of evolving market liquidity and cost of funds.
Source: HT
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Tags: bank customers, cash reserve ratio, crr, icici, interest rates, loan, RBI, reserve bank of india
RBI raises Cash Reserve Ratio, But Home Loan Rates Stay…
The Reserve Bank of India (RBI) has hiked the cash reserve ratio (CRR)- the portion of deposits banks have to keep with the RBI-to squeeze money supply and arrest inflation, which has touched 7.33 percent….
RBI raises Cash Reserve Ratio, But Home Loan Rates Stay…
The Reserve Bank of India (RBI) has hiked the cash reserve ratio (CRR)- the portion of deposits banks have to keep with the RBI-to squeeze money supply and arrest inflation, which has touched 7.33 percent….