Banks to cut lending rates

Post demonetization, banks will cut lending rates which is going to have a huge impact on the real estate industry. The affordable housing will witness a huge demand as the salaried class people will get homes loans at a cheaper rate.

Media reports have quoted the Reserve Bank of India saying that banks have collected deposits of nearly Rs 5.4 lakh crore between November 10 and 18, while they disbursed only about Rs 1 lakh crore.

As a result of this surplus liquidity, many banks have already brought down deposit rates by 15 to 25 basis points in a bid to increase lending. Some economic analysts further expect a reduction of 50-75 bps in lending rates in the next four to five months’ time.

Demonetization will also clean up the real estate and, together with RERA, may weed out the element of black money from the sector which will make the sector very transparent.