Banks fearing fall in realty prices; may tighten loan ratio

Excerpts from India Business Hour on CNBC-TV18 Watch the full show » Kotak Mahindra BSE | NSE 09/02/12 Are Mutual Funds betting on Kotak Mahindra? Other Stocks in this news ICICI Bank | Axis Bank |

By Priyanka Ghosh , CNBC-TV18

Fearing that a fall in property prices may be around the corner, banks are now tightening their grip on the amount of home loan sanctions.

 

Banks have decided to finance a smaller portion of property value owing to the concern that fall in realty prices may mean unrecoverable defaults.

 

Kotak Mahindra Bank will lower the loan amount by 70-80%; whereas ICICI Bank and Axis Bank have indicated a reduction of 70% each.