Media reports indicate that several home loan borrowers have moved their loans to banks that are offering lower rates (especially SBI) owing to cost advantage.
The movement of existing home loan borrowers from one bank to another is happening at a time when the overall growth for the industry is flat, some analysts opine. A sharp rise in house prices and high inflation eating into purchasing power have hit the demand for dwelling units.
Banks, which are expanding their home loan book, are aggressively taking over loans of other banks by offering lower interest rates and securitisation.
The shifting of loan takers from one bank to another bank is affecting the pace of expanding loan growth on an aggregate basis, reports indicate.
April 2012-January 2013, home loans grew by 10.4 per cent, almost same as 10.5 per cent in the similar period last year.
The overall demand for credit is also subdued this year, according to RBI data. Credit grew 8.4 per cent year till date, compared to 10.5 per cent the same period last year.
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