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RBI slashes repo rate by 25 bps to 5.15%

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RBI slashes repo rate by 25 bps to 5.15%

The Reserve Bank on Friday cut its key rates by 0.25 per cent to boost economy from six-year low saying reduction was necessary to revive growth.

With first quarter GDP growth plunging to 5 per cent, the RBI cut its estimate of economic growth in the current fiscal to 6.1 per cent from its earlier estimate of 6.9 per cent.

The repo rate, at which it lends to the system, has been brought down to 5.15 per cent to help reduce borrowing costs for home and auto loans, which are now directly linked to this benchmark.This is the fifth straight cut in rates by the Reserve Bank in its key rates in as much policy reviews in 2019, and takes the total quantum of reductions to 1.35 per cent.

Mr. Ashok Mohanani, Chairman, EKTA World
“For the fifth time in a row, the RBI cuts the repo rate, this time by 25 basis points which came down to 5.15%. With an overall cut of 135 BPS in 2019, the RBI has pumped lot of liquidity into the banking system which should make a clear pledge to keep the banking system glow with liquidity. While the cost of capital is headed lower, we trust future commencement will be in baby steps, motivated by lowering of inflation expectations; a global recession notwithstanding. It will definitely spur growth for the real estate sector specifically. There have been many meaningful interventions by the government and regulator which has provided a positive boost to the home buying sentiment among the potential homebuyers. Rate cuts will guarantee affordability in terms of home loans and thus lowered EMI, lower GST, and tax discount for the middle class as per as interim budget. Furthermore, we are also hopeful that the financial institutions will reduce the interest rates on construction finance. All this will certainly provide some sales momentum to real estate.” 

Mr. Rohit Poddar, Managing Director, Poddar Housing and Development Ltd and Joint Secretary, NAREDCO Maharashtra
“The MPC has delivered the fifth straight rate cut with an aim to support the government’s actions to boost the CAPEX in the economy amid benign inflation. Recently the concerns over the stability of the financial sector have taken center stage. Liquidity situation remaining in surplus during August and September, and agriculture being well-positioned to revive the domestic economy is noted as positive signs. The rate cut of 25 bps with an accommodative stance is expected to ascertain the lower lending rates in a bid to encourage economic activity across the sectors.”

Dhruv Agarwala, Group CEO, Elara Technologies, which owns, Housing.com/ Makaan.com /PropTiger.com on Monetary policy announcement – The RBI decision to further reduce the repo rate by 25 basis points to bring it to 5.15% gives the real estate sector a reason to cheer at a time when it expects sales to improve in the ongoing festive season. A reduction in interest rates means more cost-effective home loans for buyers when India’s key property markets already offer them great ready-to-move-in options to pick from, on affordable rates. In the Budget, the government has also increased the tax deduction limit on home loan interest component to Rs 3.50 lakh on properties worth Rs 45 lakh or less.  For a buyer targeting affordability, the RBI just made this festive season more auspicious to invest.   

Uddhav Poddar, MD & CEO, Bhumika GroupWe welcome the reduction of repo rate by RBI. This is the fifth such reduction of rate this year by the RBI and is in line with policy of improving the liquidity in the market. Cost of capital is one of the main reasons why Indian industries are uncompetitive as compared to global peers, and this will address this issue to some extent. However it is important that all banks should link their lending rate to repo rate and EMIs come down for the loan seekers. It is now important that the government resolves the NBFC crisis so that lending to small customers resumes like earlier, which is what will spur the economy

Rajat Goel, Joint Managing Director, MRG World
The fifth consecutive repo rate cut from the RBI is in lines with the expectations. The apex bank’s decision to cut repo rates further is in sync with the government’s recent measures, including a reduction in the corporate tax, to promote credit off take to boost economic activity during the festive season amid the ongoing slowdown.

Dhiraj Jain, Director, Mahagun GroupAs the demand in affordable housing is maximum as compared to other segments, the steps that can lead to reduction in EMIs are always welcome. We hope that banks who do not have repo rate linked lending will start doing it so that the benefits can be passed on to the maximum number of people. 

Ashok Gupta, CMD, Ajnara India
It is good  but many more steps are needed to streamline the sector and provide boost. We have been demanding single window clearance for quite some time as it will mean that projects are completed at a faster rate. If projects get stuck then the whole solution of lower EMIs will fall flat, so the need of the hour is to come up with steps that can help in completing projects.

Ashish Bhutani, CEO, Bhutani InfraWith the fifth consecutive repo rate cut of the year, the benefits of the rate cut can finally be passed down from the banks to the end consumers.The total 1.1 percentage point reduction in the repo rate and the recent linkage of repo rate with lending rates will allow consumers to immediate avail benefits in the form of cheaper loans and EMI’s. The benefit will finally be passed down to our consumers which is great news for us.

 

Raman Singla, Vice President and Business Head, SBP Group
In its 4th bimonthly monetary policy of FY 19-20, the central bank has further reduced the repo rate by 25 bps. This deduction was much needed especially at this time of the year. This move by the central bank will surely give boost to the housing segment as people will have to pay lower EMIs. The home loan borrowers will now be able to avail maximum benefits and we are sure that the people who have been waiting to buy their own house will be encouraged to realize that dream.

Yash Miglani, MD, Migsun GroupThis is indeed a welcome decision, even though it is on the expected lines. With the latest reduction, the policy rates is now close to its historical low and with retail loans including home loan rates now linked mostly to repo rates, home buyers stand to benefit on immediate basis. The move is likely to result in higher traction for properties in particularly the affordable housing both in this festive season and in the future.

Prateek Mittal, Executive Director, Sushma GroupWith fifth consecutive rate cut by the central bank the new repo rate now stands at 5.15 percent. The decision has come at the most appropriate time as the festive season is going on and according to Indian calendar this is the most auspicious time to invest in new assets. The reduced repo rate of 25 basis point along with the newly formed government policies the sector will witness the growth it has been waiting for a long time.

Vikas Bhasin, CMD, Saya HomesThe fifth consecutive rate cut is good news especially for home loan borrowers with the RBI bringing down the key policy rate,signalling lower interest rates. It is now that the banks will pass on the benefit of this rate cut to the respective borrowers of home loan. The decision will eventually witness the increase of demand for homes in real estate sector.

Anupam Gupta, Director, Sales & Marketing, GBP GroupSince the government has been taking various measures to boost the economy of the country, this move was much expected. The further deduction of 25 basis point in the repo rate will set a positive sentiment in the industry and will definitely boost sales in the sector. With loan available at a lower interest rates in the festive season along with FM’s decision of repo-linked lending rates, people will be motivated to finally take a step to fulfill their dream of owning a house.

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L.C Mittal, Director, Motia Group
With RBI reducing the repo rate 5 times in a row, shows a softer stand towards lending. This will benefit the economy as a whole as well as the entire real estate industry. One of the major concern had been the passing of benefits of the rate cut to end users by the bank and with the decision of Finance Minister of repo-linked lending rates it has been resolved. With further reduction of repo rate that too in the festive season we are believing that people will be motivated to invest with their maximum capabilities in the sector.

ALSO READ: RBI Monetary Policy LIVE: Will maintain policy easing stance till growth revives, says Shaktikanta Das

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