An analyst with a brokerage firm commented that it would take more cuts and a longer period of time for sentiments to revive because this is one single cut in interest rates, whereas over the last two years the RBI has raised rates 13 times
The Reserve Bank of India (RBI) may have slashed policy rates by 50 basis points (bps), but that wasn’t enough to lure in homebuyers. “While the rate cut of 50 basis points is definitely a ray of hope, this ray does not dispel the shadows as much as may be initially supposed. It is unlikely that residential property prices will come down because of this rate cut and it is the price of properties that is the decisive factor in residential real estate sales,” says Om Ahuja, CEO-Residential Services at Jones Lang LaSalle India.
Even for those who are hoping for a slight decrease in their EMIs (equated monthly installments) for home loans, it could turn out to be a dampener. “Banks are likely to wait for some time before incorporating the decreased rates,” said a spokesperson of State Bank of India.
Already, banks are stressed because the profit margins have been under pressure; despite offering higher interest on deposits the numbers have not gone up. “In such a situation it will be difficult to lend at a decreased rate,” said an official of HSBC Bank.
For homebuyers, things are not looking brighter. “I wouldn’t bother much if I have to pay Rs1,000 more or less per month when I am paying for a flat worth Rs60 lakh for over 10 years,” said Rahul Sadanand, who has bought a flat near Man Sarovar in Navi Mumbai. He added, “I would rather pay more per month and have the price of the flat reduced.”
To add to his worries, there are experts who believe that the situation is not going to be any different for at least a year. “Construction has stopped because the new Development Control Rules (DCR) has thrown everyone into a tizzy. On the contrary, builders are not willing to sell at a loss and are holding up prices. In such a case, hardly anyone is gaining by a measly cut,” said an analyst with a brokerage firm.
The analyst said that it would take more cuts and a longer period of time for sentiments to revive, because this is one single cut in interest rates whereas over the last two years, the RBI has raised rates 13 times. “And right now, we do not see any more cuts in some time,” he commented. He said that new home loan customers are more likely to enjoy the advantage, while people who are already paying their EMIs may have to continue with their old rates.
However, there seems to be a silver lining. The RBI has asked banks not to levy pre-payment charges on their customers, which may come as a relief.
The lender's fourth quarter net profit rose on higher income from fee and robust credit demand as well as lower provisions for loan losses
Mumbai: Private sector lender HDFC Bank on Wednesday reported 30.4% jump in its net profit at Rs1,453.1 crore for the fourth quarter ended March, driven by increase in advances, reports PTI. Its net profit in Q4, 2010-11 was Rs1,114.70 crore.
Total income of HDFC rose 32.1% to Rs8,880 crore in the January-March quarter of 2011-12, from Rs6,724.3 crore in the year-ago period, HDFC Bank said in a filing to the BSE.
Net interest income (interest earned less interest expended) during the fourth quarter was Rs3,388.3 crore, as against Rs2,839.5 crore in the same period a year ago, registering a growth of 19.3%. This was driven by loan growth of 22.2% and a core net interest margin (NIM) for the quarter of 4.2%, the bank said.
The board of HDFC Bank has proposed a dividend of 215% or Rs4.30 per share for the financial year ended March 2012.
For 2011-12, the bank posted net profit of Rs5,167.1 crore, an increase of 31.6% from Rs3,926.39 crore in the previous year. HDFC earned an income of Rs32,530 crore during the year, compared to Rs24,263.4 crore in the previous fiscal. The bank's consolidated net profit increased by 31.4% to Rs5,247 crore in 2011-2012.
Its total balance sheet size increased by 21.8% to Rs3.37 lakh crore, from Rs2.77 lakh crore as of March 2011. Recording a growth of 22.2%, total gross advances were at Rs1.95 lakh crore while total deposits grew by 18.3% at Rs2.46 lakh crore.
The Capital Adequacy Ratio (CAR) of the bank stood at 16.5% at the end of 2011-2012 as against 16.2% as of March 2011.
The gross non-performance asset (NPA) as a proportion of advances declined to 1% against 1.1% in the previous fiscal. Net NPA, however, remained stable at 0.2% during the year, it said.
The decision to issue show-cause notices to the companies sitting idle on captive coal blocks was taken by a panel looking into the development of reserves
New Delhi: The Coal Ministry is likely to begin this week the process of issuing show-cause notices to 58 captive coal block holders, including PSUs, which have not started the development work of mines in stipulated time.
"The coal ministry is likely to issue show-cause notices to 58 coal block holders, both in public and private sector, sitting idle on them this week," a top official in the coal ministry said."Coal Minister Sriprakash Jaiswal gave go-ahaed to the proposal yesterday," he added.
The decision to issue show-cause notices to the firms sitting idle on captive coal blocks was taken by a panel looking into the development of reserves, sources said.
Concerned over the increasing demand-supply gap, the Ministry in January this year had reviewed the progress of mines allocated to companies, including Tata Steel, Coal India, SAIL and NTPC for captive use.
The progress of the blocks allocated to Jindal Power, Jindal Steel & Power, Balco and MMTC was also reviewed during the two-day meeting.
Last year, the Coal Ministry had cancelled allotment of 14 coal and one lignite block to six PSUs, including NTPC, and three private firms for failing to develop them.
However, in January, the government gave back six coal blocks of the deallocated mines to firms, including Damodar Valley Corporation (DVC), Tenughat Vidyut Nigam Ltd and NTPC.