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Banks may be given incentive to extend loans in backward areas: RBI Dy Guv MK Jain

Banks may be given incentive to extend loans in backward areas: RBI Dy Guv MK Jain

Finance
RBI Deputy Governor MK Jain on Wednesday made a case for incentivising banks to extend loans to poor in backward areas in a bid to promote financial inclusion. Speaking at an event organised by the National Bank for Agriculture and Rural Development (NABARD), Jain said despite impressive growth in formal agriculture granted, there are still several challenges which need to be tackled. Data on the average loan taken by agricultural households indicated that 72 per cent of the credit requirement was met by institutional sources and 28 per cent from non-institutional sources, he said quoting NABARD Financial Inclusion Survey Report 2016-17. Further, the analysis of state-wise flow of institutional agriculture credit has revealed uneven distribution of credit among states, compared to their co...
Bank of Baroda to pass on RBI’s repo rate cut benefit to external benchmark linked loans

Bank of Baroda to pass on RBI’s repo rate cut benefit to external benchmark linked loans

Finance
Bank of Baroda said Monday that it will pass on the benefit of the latest 25-basis points (bps) repo rate cut announced by the Reserve Bank of India in its bi-monthly monetary policy. In a press release, it said that the benefit will be applicable on home, car, education, personal loans and all other retail loan products by linking all new retail loans automatically to external benchmark rate (repo). Under the repo-linked rate scheme, there will be a single rate offered for all customers whether they are salaried, self-employed or a non-resident Indian. The bank also offers an incentive to customers to maintain or improve their credit score to avail of the best rates. V.S. Khichi, Executive Director, Bank of Baroda said, "We at Bank of Baroda want to pass on the reduced external benchmark ...
Loans to become cheaper after RBI cuts interest rate to a decade low

Loans to become cheaper after RBI cuts interest rate to a decade low

Finance
MUMBAI:Home, auto and other loans are set to become cheaper after the Reserve Bank of India (RBI) on Friday cut interest rates for a record fifth straight time to almost a decade low as it moved aggressively to revive economic growth languishing at six-year lows. With all six members of the Monetary Policy Committee (MPC) voting in favour of a rate cut and for retaining the accommodative stance, the benchmark repurchase rate was cut by 25 basis points to 5.15 per cent. The previous lowest repo rate of 5 per cent was recorded in March 2010. Following the rate cut, the reverse repo rate was reduced to 4.9 per cent. The RBI revised downwards its estimate for GDP growth in the current fiscal to 6.1 per cent from 6.9 per cent it had previously estimated after lower-than-expected 5 per cent g...
Retail loans show signs of stress

Retail loans show signs of stress

Finance
Mumbai: The last strong bastion of Indian banks is on a shaky ground, with early signs of a stress build-up in retail loans starting to surface, show data compiled by a credit information company. CRIF High Mark's analysis of a retail loan portfolio of 35,000 crore at the end of the quarter through June showed that consumers were delaying payments, raising worries over a rise in delinquencies in these portfolios. Of the portfolio it analysed, loans at risk of delinquency in 30-90 days were 3% at the end of June. Segment-wise assessment of the auto loan portfolio showed that at least 4.13% of the 4,500 crore loans disbursed were at risk of default. "Our assessment has shown that there is a 30 bps (basis point) increase in the portfolio-at-risk - 31-90-day payable has increased by 74 bps ...
Credit crunch leads to increase in demand for gold loans

Credit crunch leads to increase in demand for gold loans

Finance
Refused a loan by a state-run lender and desperate for funds to buy cotton seeds before the summer sowing season window closed, Indian farmer Babasaheb Mandlik ran out of choices - he pawned his wife's gold jewellery. Mandlik, who owns an 8-acre cotton farm in western India, pledged 70 grams of gold, almost all of his wife's precious trinkets, in June in return for 150,000 rupees ($ 2,105). "Pawning the jewellery was a difficult decision as my wife likes to wear it at festivals and weddings," 50-year-old Mandlik told Reuters. "I convinced her that we didn't have any other option." Mandlik is not alone. While pawning gold has long been an option for quick funds in a country that is the world's second-biggest consumer of the yellow metal, several lenders told Reuters of unprecedented demand ...