Home loans to become cheaper?

MUMBAI, June 8: A good news for home buyers. The Reserve Bank of India yesterday has reduced the risk weightage on home loans above Rs 75 lakh to 50% from 75% earlier.

RBI said that considering the importance of the housing sector and linkages to the economy, it has been decided to reduce the risk weight on certain categories. The bank has also decided to reduce the standard asset provisioning on certain categories of home loans.

In its bi-monthly review, RBI has kept the marginal standing facility (MSF) - an emergency funding facility continues to remain at 6.5%.

In another move to ease liquidity in the banking system, Reserve Bank of India has reduced the statutory liquidity ratio (SLR). RBI said that the reduction in SLR was aimed at allowing banks to comply with the international norms on liquidity coverage. These norms will come into effect from January 2019.

Finally, customers are not fully satisfied because the interest on home loans below 75 lakhs have not been reduced. Let's hope that the bank cut its rate in Next meeting which is to be held on August 1-2 2017.