All citizens of India..pls take a look at this excel spreadsheet.. Its something none of us can afford to ignore. The sheet shows the progress made by our Indian banks (both public and private sector) in competing with each other to lend to real estate developers. The trends in real estate developer lending has seen robust growth whereas the amount lent to housing loan borrowers has shown a sizeable decline year on year. All the data has been collected from RBI's website..What does this data tell us?
E:\real estate shocker.mht
1. Real estate developers with poor fundamentals are financing their
working capital requirements through bank funding whereas the
needy section of our population (which is u and me)that needs
affordable housing is being declined bank loans.
2. A company like HDIL and a few other real estate companies have
increased their top management remuneration by 200% yoy in a
recessionary period like 2008-09 despite poor operating and
financial performance. Why do these companies need bank funding?
They get to have the cake and eat it too.
Remember it is your money that goes into the bank as a deposit that get lent to real estate developers. This explains the reason why real estate prices will always remain high in India. When these developers, through political nexus or some other means obtain easy loans from banks, there would be no need for them to bring down prices and make homes affordable. The needy segment and the large masses living in slums will never get housing loans to buy their dream of owning a piece of real estate.
Given this background, I would request every bank deposit account holder to enquire with your branch manager as to what is their exposure to real estate loans. We have the right to question them, since its our money they are lending out happily. Only when awareness amongst the public at large increases, will a malpractice of this magnitude end, to ensure proper allocation of funds borrowed from us by banks to the needy sections of the economy.
Else India will remain a slumdog economy:(
About Me
- dharma
- I believe in "Baptism by fire" that will transform me from an average joe to a true blue bee's knees in corporate finance and investment banking
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1 comment:
Hi,
While you have a good point of Banks not being responsible/ or RE companies taking advantage of depositors through the banks.. I think people just go for the bank that gives the max possible interest rate and are not bothered about where the money goes. Also, as long as the bank is nationalised or well established no one cares about these issues as long as they get the best amount of money on time.
I think the role of the consumer protection agencies should be higher in this case and should also be more visible to the public in addressing these issues.
There could be more ways of dealing with this, but these are my 2 cents.
By the way, is there a link to the data/excel sheet?
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