Page 19 - Banking Finance July 2020

HOUSING

time, we need to keep some things in to be successful the progress has to be rates, the borrower must meet the
mind for it to have an impact on the monitored and all the stakeholders are lender's eligibility criteria which con-
real estate market," Gupta said. on board," she said. sists of parameters such as home size,
loan-to-value ratio, gender, source of
"There is an urgent need for capacity
building when it comes to expertise From HDFC to PNB Hous- income, age, credit score, and any
building. The government should con- ing, lowest home loan in- other parameter decided by the
sider creating a dedicated task force lender.
which is focused on rental housing. The terest rates offered by top While banks offer a large variety of
task force should consist of government housing finance compa- credit products, home finance compa-
officials and private sector experts like nies nies focus largely on providing home
developers, lawyers, who all work very loans. They often become the go-to
HDFC Ltd continues to provide the low-
closely," she added. option for borrowers for various rea-
est rates on home loans by the largest
Rental schemes which are also called home finance companies. HDFC pegs sons.
social schemes have been adopted in Home finance companies are known
its lowest rate on home loans at
many countries with nations like 6.95%, which compares favourably for easier and hassle-free paperwork,
Singapore seeing successful implemen- with the lowest home rates being of- providing higher loan-to-value to bor-
tation. The government expects the rowers, and having relaxed norms on
fered by banks. As of August 27,
scheme to benefit 3.5 lakh people who around 10 large banks offer home credit scores which allow borrowers
are a large part of the workforce in- with lower scores an opportunity to
loans at rates which are at 7.00 or
cluding in areas like manufacturing , seek home finance, informs
construction, service providers and lower. However, HDFC is the only large BankBazaar.
non-banking or home finance company
various other sectors. Not only that,
offering a rate under 7% to the eligible Home loans from HFCs are normally
the scheme is being designed to in- linked to the Prime Lending Rate
clude students who are looking to borrowers. whereas it's now the repo rate which
move from small towns to urban cen- In the table, we can see some of the is the preferred home loan benchmark
tres for better opportunities. lowest rates from home finance com- rate for banks. Currently, PLR-linked
panies. The best rates are currently
"We need to try and engage with con- rates are seen to be higher than repo-
under 9% while only two lenders pro-
sultants and make them part of this linked rates. Therefore, borrowers with
task force. We need to professionalize vide home loans under 8%. These rates good credit scores and income eligibil-
are the lowest rates only which are
rental housing management. Govern- ity may be better off seeking the low-
reserved for eligible borrowers, ac-
ment has to intervene to regulate the est available rates. Borrowers with
rental market for the benefit of the cording to BankBazaar. higher loan-to-value requirements can
owner and the tenant. For the scheme To be eligible for the lowest home loan approach non-banking lenders. T

Minimum Rs. 500 cr must for licence to sell petrol, diesel to bulk

users

The government said any entity with a net worth of at least Rs. 500 crore is eligible for obtaining the liberalisedlicence
to sell petrol and diesel to retail and bulk consumers. Clarifying on the November 2019 liberalised fuel licensing re-
gime, the Ministry of Petroleum and Natural Gas said any entity with a net worth of Rs. 250 crore can get a licence
to retail petrol and diesel to either bulk or retail consumers.
For those seeking authorisation for both retail and bulk should have a minimum net worth of Rs. 500 crore at the time
of application, it said in a statement. Last year, the government had relaxed norms for retailing of auto fuels, allowing
non-oil companies to venture into the business - a move that could help private and foreign firms to enter the world's
fastest-growing market.

BANKING FINANCE | JULY | 2020 | 19