The interim budget has laid the ground for cheaper home loans and lower interest rates in general, according to lenders. The lower fiscal deficit has meant borrowing is almost Rs 1 lakh crore lower than expected. The Centre is seen as having put subtle pressure on RBI to boost liquidity and soften interest rates. Financiers are also expecting home loans to get cheaper because of the two affordable housing schemes the government announced.
Green shoots are becoming visible in India’s investment cycle, according to Kotak Mahindra Bank director Shanti Ekambaram. The government’s focus on infrastructure development has created opportunities for private sector capital expenditure. However, the RBI has tightened norms for unsecured consumer credit, prompting caution in the financial sector. Last month, the RBI revised norms for risk weights on certain consumer loans, affecting the capital adequacy ratio of banks.
