Dont encourage housing schemes like 80:20: Bank of India

In an interview to CNBC-TV18, VR Iyer, CMD, Bank of Indian spoke about home loan and rate of interest.
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Oct 01, 2013, 04.35 PM | Source: CNBC-TV18

Don't encourage housing schemes like 80:20: Bank of India

In an interview to CNBC-TV18, VR Iyer, CMD, Bank of Indian spoke about home loan and rate of interest.

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Dont encourage housing schemes like 80:20: Bank of India

In an interview to CNBC-TV18, VR Iyer, CMD, Bank of Indian spoke about home loan and rate of interest.

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VR Iyer (more)

CMD, BoI |

We have hiked the rate of interest on advances from September 2 but we have not increased any rate of interest on the deposit side.

- VR Iyer (CMD)

In an interview to CNBC-TV18, VR Iyer, CMD, Bank of India spoke about RBI's directive to banks asking them to discontinue the 80:20 housing schemes.

Below is an edited transcript of the interview.

Q: Does Bank of India has this kind of schemes?

A: No, we do not encourage this type of schemes.

Q: Do you have even one of them. You may not encourage but you may have them because builders are offering them everywhere?

A: I do not whether earlier the schemes were there in place. I need to check up on that.

Q: Is there a flip problem that when this is withdrawn some builders could default? Do you fear a marginal increase in real estate defaults?

A: The builders should not default. Actually, these types of loans are given to well-established players in the market. It is not given to all the real estate developers. The well-established and who have a proven track record then these types are loans are encouraged in the banking industry.

Q: Has there been reportage of wrong utilisation of funds by the builders with regards to this scheme?

A: No, there has been no report. Of course, I need to check with the banking industry phenomena and I do not have enough data to comment on this.

Q: How much of these loans have you seen the past two years, for example out of the entire property segment that maybe a bank has, how much of the loans comprised of such an 80:20 scheme?

A: I need to go back to the database and I have to work out on that.

Q: Now it looks like interest rates are going to stay on where they are for a goodish bit. When are you hiking base rates?

A: We have hiked the rate of interest on advances from September 2 but we have not increased any rate of interest on the deposit side because as of now we are still comfortable with but we will look into it sooner.

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Dont encourage housing schemes like 80:20: Bank of India

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