LIC Housing Finance, the finance wing of Life Insurance Corporation (LIC) of India has big ambitions set for the upcoming fiscal.

With the demand for affordable housing taking a leap, the company is planning for prodigious unfurling of its loan base.

"Last year it was a difficult year for housing finance companies, as we could grow only by 24 per cent and this year our growth is over 60 per cent. So with this trajectory we will...

Public sector lender, Central Bank of India is planning to buy back the stakes of all its partners in the mortgage finance subsidiary by the end of current fiscal. The mortgage finance subsidiary of the bank runs under the name of Centbank Home Finance.

Unit Trust of India (UTI) which is one of the promoters of the mortgage finance subsidiary has agreed to sell the 16 % stake it holds to the bank, a senior...

Allahabad Bank CMD, Mr. J.P.Dua has said that the Indian market is flush with liquidity and that the trend is all set to continue in future too. "The reverse repo levels have been hovering above Rs 20,000 crore, which shows there is ample liquidity for the borrowers," he said.

With the teaser rate tenure coming to an end, it is time to gather the market share earned by the different players during the reign.

Of the total amount of Rs. 45000 crore lent as cheap loan, SBI seems to have gathered the biggest chunk of the pie by sanctioning a colossal 67% of the total loan amount offered during 2009.

The trump card used by the banking sector this year has been the teaser home...

RBI's three year plan of financial inclusion has been supported as well as adopted by three states of India so far. RBI sources now acknowledge the inclusion of another member in the list by the name of Tamil Nadu. The financial inclusion drive is a measure taken by RBI to spread banking awareness in rural and unbanked parts of India.

The states which have already joined the drive are Karnataka, Andhra Pradesh and Gujarat. These...

Base rate system which has been in the limelight since quite some time has still some more days to hit the banking platform. The Reserve Bank of India has declared that the base rate system which was to become effective from 1st April 2010 will now be applicable from 1st July 2010.

"It will start from July 1. They (banks) wanted some time," RBI Deputy Governor Usha Thorat said. The decision was taken after the top...

The new interest rate system adopted by the RBI as base rate system has put commercial banks in concern. These banks are now seeking clarifications regarding exclusion of home loan pricing from the base rate system.

Ever since the idea of propagating the base rate system has been adopted by the RBI, the commercial banks are in a dilemma regarding various aspects of home loan. They have been in talks with RBI regarding this since quite...

Australia and New Zealand Banking Group (ANZ) has finally received approval from RBI to restart its operations in India after 10 years. The group plans to set up its first branch in India in Mumbai in around a year.

The bank is eyeing a pretax profit of A$100 million ($90.50 million) from its Indian operations in the upcoming three to four years.

ANZ is the fourth largest bank in Australia and plans to extract major profits from...

33 regional rural banks (RRBs) of the country are to receive capital infusion from the government so as to increase their capital risk weighted assets (CRAR) ratio to 9% by 2012.

CRAR ratio is an indicative of a bank's strengths in terms of capital. The finance ministry had been planning to provide capital infusion to these banks since the last six months. The plan finally got validation during the budget presentation on 26th Feb 2010. The...

The Indian operations of HSBC have posted a 44% drop in the net profits of the bank for the year ended 31st December 2009. This decline can be accounted to as a result of Rs. 1000 crore loss incurred by the retail banking segment of the bank. The commercial banking segment of the bank has also showed a downtrend. However, HSBCs profits from its non banking services like brokerage and asset management has improved.

Despite...

Banks have sought for clarity regarding pricing of old home loan rates from RBI in the context of the new ‘base rate system' which ought to set in from April 2010. Home loans that have been set for 15-20 years have no provision for change in their interest rates that is the prime lending rate (PLR) to which floating interest rates is linked.

The issue has arisen due to RBI's new directive regarding the...

The country's second largest public sector lender, Punjab National Bank has set an acquisitive target of achieving Rs. 10 lakh crore business by the year 2013.According to chairman and managing director of PNB, Kasargod Ramachandra Kamath, it has targeted itself to this benchmark from the Rs 4 lakh crore business which it has earned as on December 2009.

The bank had earned a net profit of Rs. 1,011 crore in the last quarter. It is...

Mortgage/home loan Insurance is increasingly becoming popular in the Indian Mortgage Industry. Mortgage insurance is a special type of insurance that guarantees repayment in the event of demise or disability of the borrower. The tenure of such a policy is usually 12 months, but can be longer in some cases.

Most home buyers, by the time they have received possession would have exhausted all their short-term savings. While they have a real estate asset, they are...

With real estate prices picking up after a lull of one year, most lenders are concentrating on the home loan segment. ICICI has just intensified the competition by offering a combination of fixed and floating rate. This comes at a time when most banks are speculating an interest rate hike. With a number of options available with the lenders, how do you identify the best option?

Which is the cheapest option?

One should not decide on a...

Following cuts in key policy rates (repo and reverse repo) and the cash reserve ratio (CRR) last year, home loan rates have reduced to great extent.

RBI switched to a softer monetary policy by reducing its policy interest rates to boost economic activities and prevent the country from going into recession as few other western economies.

However, economic conditions have improved significantly over last few quarters and the capital flow in the system is good.

With the...

Reserve bank of India has approved private companies to promote small local area banks (LABs). These banks have an area of operations up to three contiguous districts.

This was proposed by the Raghuram Rajan committee, appointed by Planning Commission in its report in 2008. The committee said that these banks could ensure inclusive banking. The Rajan committee felt that these banks would be more effective in reaching out to poorer households and local small and medium...

ICICI bank is the second largest lender in India, the largest being SBI. It provides an array of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management.

The bank has its presence in the United Kingdom, Russia and Canada; branches in United States, Singapore, Bahrain, HongKong,...

The government is likely to modify the draft direct tax code to retain tax shelters and principal repayments for home loans to make the new code more attractive for the average Indian, said a Finance Ministry official.

According to the proposed direct taxes code there would be no tax incentives for loan-funded house purchases that are for personal use. The code is expected to become operational from April 2011.

Presently, taxpayers are allowed to deduct interest...

The largest Indian lender, State Bank of India (SBI) does not see any change in the interest rates in the near future.

The bank's chairman O.P. Bhatt pointed out that the bank's initiative I the home loan segment had helped both customers and real estate developers.

"We reduced the home loan lending rates to 8 per cent per annum and as a result developers and customers started returning to the market. Other banks were also forced...

Before buying a house, buyers usually consider factors like proximity to work, school, view, water supply and facilities within the apartment complex amongst others. But, besides this, you should also ensure that you are not being trapped. You can approach a home loan provider to find out if it has provided loan for any other apartment in the same complex. It is better to pay a loan processing fee to the Housing Finance Company...