With the beginning of New Year 2017, the Prime Minister of India, Narendra Modi came up with some new schemes that will boost the housing sector. These announcements were made on Saturday which was also the last day of the year 2016.
His announcement was clearly focused on benefiting the middle and lower-income classes as he asked banks to lower home loan interest rates. This meant that the loans of up to Rs 9 lakh taken under the two new scheme of Pradhan Mantri Awas Yojana (PMAY) will get interest subvention of 4 % while loan up to Rs 12 lakh will get a 3 per cent. The Prime Minister also added that under the Pradhan Mantri Awas Yojana, the number of houses built for the poor in rural areas will be increased by 33 %.
The largest lender of the nation, State Bank of India slashed a marginal cost of funds based lending rate by 0.9 per cent. The bank statement said that for one-year tenure, the lending rate will now be 8% instead of 8.90%. Following the same path, came other public sector lenders, Punjab National Bank and Union Bank of India. Both of them also reduced the benchmark of the interest rate by 0.90 %. The one year MCLR rate of PNB was cut by 0.7 % which went to 8.45 % from 9.15 %.
Further, Bank of Baroda, Bank of India, IDBI, OBC and Canara Bank also reduced their rate by 1.11 %, 0.47 %, 0.43 %, 0.47 % and 0.38 %, respectively. The private sector bank like ICICI Bank, YES Bank, HDFC Bank, Kotak Mahindra Bank and IDFC Bank, on the other hand, were down between 0.50 % and 0.83 %.