India 4 October 2016: Considering the political and international turmoil happening all around, the RBI was likely to keep the key rates unchanged but amid varied speculations, the apex bank has finally laid rest to the expectations by cutting the repo rate by 25 basis points in it’s latest policy review. The new repo rate now stands at 6.25 percent from the previous 6.50 percent. Reverse repo rate is now at 5.75 percent; Cash Reserve Ratio (CRR) at 4 percent and Statutory Liquidity Ratio (SLR) at 21.5 percent respectively, remains unchanged. This rate cut coming during the festive season is sure to boost sentiments both among lenders and borrowers because this benefit if passed well to the buyers is sure to provide cushion to all. This also happens to be the first monetary review policy by the newly appointed RBI Governor, Urjit Patel, and this rate cut will allow the realty sector in the country to blossom during the festive season.
Rajesh Goyal, Vice President CREDAI-Western U.P. & MD, RG Group
This move was pretty much on the cards looking at the economic recovery witnessed over the last couple of quarters. For long there has been no reduction offered by the other banks but with the festive mood already set in and people looking for better and better options, banks can cash in well and allow further support to the real estate sector.
Vaibhav Jain, CMD, Rise Group
RBI has been extremely pro-active in terms of bringing relief to the economy and pushing the banks forward to provide final benefit directly to borrowers through reduced EMIs. Real estate sector in particular was in dire need of a repo rate reduction as we are standing in the final festive season of the year. Sentiments will now become better as customers will be expecting banks to lower their rates that will be profitable for them prior to a big purchase such as, property.
Dhiraj Jain, Director, Mahagun Group
There exists a direct relation between reduction in lending rates by banks and an increase in demand for property. It is then just a matter of proper timing by the banks while adjusting the rates. The festive season of the Hindu calendar has just commenced where massive demand is observed every year, and this is the time when potential customers plan and allocate their funds for the big purchase.
Deepak Kapoor, President CREDAI-Western U.P. & Director, Gulshan Homz
A fall in lending rates today will promote the sentiments in the market and allow people to strategise their upcoming purchase as the maximum purchase decisions involving big amounts are made during this period. RBI has played its part well today and now the ball is in banks court. This will not only enhance the purchasing power of the customers but also allow them to even go ahead with a better purchase.
Kushagr Ansal, Director, Ansal Housing
This rate cut has come at the most opportune moment which could have happened on the doors of Indian real estate. There had been many positives building up to this festive season like the RERA already passed, GST to be implemented by the onset of the next financial year, considerable reduction in FDI limitations, the only stone left unturned was a rate cut by the apex bank. Now, with the cut also done by the apex bank, there could have been no better sentiment enhancer for the already upbeat mood in the real estate sector.
Quote on RBI Policy Review - Mr. Amit Modi, Director, ABA Corp and Vice President CREDAI Western UP
Spokesperson: Mr. Amit Modi, Director, ABA Corp and Vice President CREDAI Western UP.
“This is a surprisingly good development, since easing interest rate will help revive health of businesses like Real-Estate which are highly sensitive to interest rate movements, but while it is indeed a step in the right direction, we sincerely hope that both Finance Ministry as well as the RBI asks all the Banks to transfer the benefits to the end consumer, else this move will severely stop short of benefiting the consumer and only help in buffering the bottom lines of the bank. This initiative has to be transferred to its end beneficiary for any positive effect on ground to the ongoing economic cycle.”