Southern states to seek direct sanction of loans to tenant farmers and no collateral security on loans

The southern states want the bank loans to the tenant farmers should be directly sanctioned and no collateral security should be taken from small and micro enterprises in the state for giving loan. The southern states finance ministers conference is going to be held on July 20 and the Chief Minister K Rosaiah told that the state will taking up this agenda, to arrange for sanction of loans directly to the tenant farmers with suitable guidelines so that they can get loans at 7 per cent interest and other benefits including crop insurance, with Union finance minister Pranab Mukherjee, who will be attending the meet.

The chief ministers or finance ministers of the southern states including Andhra Pradesh, Tamil Nadu, Karnataka, Kerala and Union Territories of Pondicherry, Andaman and Nicobar Islands and Lakshadweep will be attending the meet.

All the CEOs, CMDs of public sector banks and financial institutions, Reserve Bank of India deputy governor and NABARD chairman will also attend the meeting.

Rosaish reviewed the arrangements and issues with the chief secretary S V Prasad, special chief secretary (finance) G Sudhir and other officials, to be taken up in the meeting.

The chief minister told that his main focus will be on getting loans without collateral security for micro, small and medium enterprises (MSMEs). He told a certain percentage of bank loans be given to MSME sector under the Credit Guarantee Trust.

Rosaiah added that he will ask for 2% interest subvention for the loans that were rescheduled due to floods and drought in the state also for waiver of the service charge, being collected on SMART cards of NREGS beneficiaries.

In a press release, the CMO stated in the meeting the financial issues confronting the states and the will also be taken up, also the CMDs of public sector banks and Union finance minister will respond to their queries and problems.

The other issues to be taken up in the meeting include state wise flow of credit and credit related parameters like agriculture credit, MSME credit, housing and education loans, credit to weaker sections and minority communities and CD ratio etc.

Also, the progress of Centrally sponsored schemes like Swarnajayanti Gram Swarogar Yojana (SGSY), Swarna Jayanti Shahari Rozgar Yojana (SJSRY), Prime Minister's Employment Generation Programme (PMEGP), revival package for short term cooperative credit structure, implementation of Aam Admi Bima Yojana and implementation of co contributory pension scheme by the states for unorganized sector under the Swavalamban Pension Scheme of the Government of India will be part of the agenda in the meeting.

SBH extended special home and car loans rates

After the two big lenders the State Bank of India and HDFC bank, State Bank of Hyderabad has extended its special interest rates for home and car loans.

The bank said the interest rates of home loans for first year will remain at 8.5% (fixed) and for the second and third years for loan up to Rs 50 lakh it would be offering 9.25% (floating) further for the second and third years for loans above Rs 50 lakh it is offering 9.5% (floating).

The bank will link the rate to base rate from the fourth year onwards which will be 9.75% for loans up to Rs 50 lakh and for loans above Rs 50 lakh the rate will be 10.75%.

SBH has set its base rate at 7.75%.

On car loans bank is offering interest rate of 8.5% (fixed) for new cars for the first year and for second and third years it is offering floating rate at 10.5%. Thereafter from fourth year onwards, bank will link the rate to base rate which will be 11.5% for loans up to Rs 5 lakh and for loans above Rs 5 lakh the rate will be 11.25%.

LIC Housing Finance introduced three loan products with special rates

With the introduction of base rate system for loans change in market home loan market is expected. Anticipating the change in home loan market LIC Housing Finance Ltd. has announced three different products offering various options to the customers.

1. Floating Rate: New home loan borrowers who prefer Floating rates ab-initio for them the company is offering special rates of 8.75% for loans up to Rs 1.50 crore. Before this special rates were offered at 9.75% for loans above Rs 75 lakhs up to Rs 1.50 crores.

2. New Fix-O-Floaty: Home loan borrowers who want to go for short term fixed rate, company is offering the new Fix-O-Floaty loans at competitive rate of 8.90% for loans up to Rs 1.50 crores. Up to 31.03.2012 fixed rate will be offered and thereafter the rate will be floating. Earlier the rate of interest offered for loans above Rs 75 lakhs up to Rs 1.50crores was 9.90%.

3. Advantage 5: In today’s scenario it is not possible to predict the movement of interest and many borrowers might opt for fixed lending rate for a considerable long period. To meet the borrowers need LICHFL has introduced a unique product called ‘Advantage 5’ under which the lending rates are fixed at 9.25% for 5 years and thereafter on floating basis.

The new rates will be effective from 1st July 2010.