MUMBAI: With leading public sector and private sectors banks slashing benchmark lending rate, the industry has welcomed the move and hoped that will help to strengthen the economy, including the real estate and the construction sector.
Following the Prime Minister Narendra Modi’s address to the nation on Saturday, lenders such as SBI, PNB, Union Bank of India, IDBI and ICICI has announced rate cuts, a move that is expected to help pick up of disbursement significantly.
“As loans become cheaper, sectors such as consumer durables, automobiles and housing should see a recovery. Various measures have been taken to encourage lending to the SME sector. We expect start-ups and SMEs to play a major role in the next growth cycle,” CII Director General Chandrajit Banerjee said.
“The steep cuts announced in the home loans up to 90 basis points will benefit the home buyers as their borrowing costs will come down significantly and their affordability factor improves simultaneously,” said JC Sharma, VC and MD, Shobha Ltd. It is expected that demand for homes will get significant boost with this welcome step, he added
While budget is round the corner, Sharma also hoped that government will also give due importance to various demands put forth by the housing sector.
Modi had appealed to the banks flush with currency to move beyond their traditional priorities.
“It is heartening to see the banks moving towards an easier lending rate regime and we hope that this rate cut cycle will be carried forward. With ample liquidity now at their disposal and credit growth moving at slow pace, a lowering of interest rates was the need of the hour,” Ficci president Pankaj Patel said.
The move is also expected to help the small and medium enterprises to get loans easily.