Oct 01, 2013, 04.35 PM IST | 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.

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

BoI

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Q: Is there a flip problem that when this is withdrawn some builders could default?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.

Bank of India stock price

On July 22, 2014, Bank Of India closed at Rs 284.95, down Rs 1.55, or 0.54 percent. The 52-week high of the share was Rs 356.75 and the 52-week low was Rs 126.95.


The company's trailing 12-month (TTM) EPS was at Rs 42.45 per share as per the quarter ended March 2014. The stock's price-to-earnings (P/E) ratio was 6.71. The latest book value of the company is Rs 465.37 per share. At current value, the price-to-book value of the company is 0.61.

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