Byapaar.com – The Indian Business Blog

Amidst global economic turmoil and financial crisis caused by US subprime lending crisis that caused havoc in markets around the world, Indian nationalized banks in consultation with the government have announced reduction of interest rates on home loans of up to Rs. 2 million that could lead to partial impetus in the realty sector. Just last week industrial production in India contracted for the first time in 14 years.

According to the new rates set by the banks, housing loans of up to half a million Rupees will now have interests of 8.5 percent and that of loans between half a million to two million will have interest rates of 9.25 percent. Presently, interest for home loans is 9.75 to 10.5 across various sectors in the banking industry.

This brings very good news for millions common people who can not afford to think of a house or flat beyond Rs. 2 million. Another additional feature of the new housing loan package is that interest rates will remain frozen for 5 years which means clients will not have to worry about increased equated monthly installments (EMIs) during this period. Also they will enjoy the benefit of rate cuts in between while banks will take the burden if rates rise. After five years, consumers could choose either fixed or fluctuating rates according to their choice. This makes debt management a lot easier for the common person.

Not only this, but banks have also reduced the margin requirements for loans. While previously, borrowers were required to pay between 20 to 25 percent of the total amount as margin money, it has been trimmed down to 10 percent for loans up to half a million and 15 percent for loans between half a million to 2 million.

According to bankers, this move will see around Rs. 150 to 200 billion being released over next few years and help the common men who constitute eighty percent of nationalized banks’ housing loan book. (continue reading…)

Different people have different needs at various stages of life. So they have to plan accordingly and make some investments for financial security. For long, state owned insurance companies like Life Insurance Corporation of India (LICI) have been offering lots of investment options in India along with traditional saving agencies like banks and post offices. LICI has been the most dominant player in this field with almost monopoly status.

But the scenario has changed since Indian economy started liberalizing and opened up the sector to private and foreign players through IRDA bill in 1999 amidst protest from many quarters. Not surprisingly the who is who of global insurance majors rushed into Indian market and set up shops after tying up with local companies who have little or no experience in insurance business. Soon the market became hot as news players started to market their products more aggressively seldom seen in India. People got spoilt of choice as agents now came to homes or offices with insurance quotes their offered by their respective companies. My intention here is not to write about the history of insurance companies but it is absolutely necessary to know the background for the main topic.

So everything has been going smoothly for all with a booming stock market and fast growing economy. It has been like honeymoon for both investors and insurance companies. But nothing in a market environment is permanent and one fine day in the middle of September this year everything came tumbling down as world financial markets crashed. As most insurance companies invest funds they collect from clients, most of them suffered huge losses due to the global financial problem phenomenon.

To cite a personal example, one of my colleagues invested Rs. 50,000/- with an insurance product offering high returns (thus highly risky) and linked to stock market with life insurance as an added option, (continue reading…)

It has been almost two weeks that the biggest and most heinous terror attack on Indian soil had ended. Life is slowly coming back to normal. But the post mortem and ghost hunting will continue for a long time to come. Here, I will try to express my views on roles played by the media.

I was watching the Mumbai carnage on T.V. Suddenly the channel switched to broadcast a news conference called by the Indian government where a government spokesman had to appeal to the media (especially the electronic media i.e. TV) not to show everything live live as intelligence sources suggested that terrorists were getting wind of rescue moves by security forces well before they were actually being carried out. After the news conference was over, the channel switched back to the war zone and resumed live broadcasting. It was seen that hundreds of journalists – both from electronic and print media were jostling for the best coverage while commandos were seen getting ready to fire from their mortars at a particular target and the cameraman following the target and showing a very close picture of the same using the advanced zoom. No wonder, terrorists could see where the attacks were coming from and what was the target as the correspondent was explaining everything clearly for the viewers.

No wonder a great commercial move as it had the audience glued to the screen.

The question is, is it responsible journalism especially when those heinous terrorists were taking advantage of the live TV broadcasting? There was a time when the media used to practice restraint, act as keeper of (continue reading…)

Its so surreal – almost as if I was watching a Hollywood or Hong Kong flick! When I opened the TV yesterday to get myself updated on happenings around the country – I was shocked to hear live gunshots and police personnel moving around Mumbai streets with their firearms firing at something. Before I understood something – I saw India’s premiere train station Victoria Terminus being attacked by terrorists. Two other seven star hotels ( The Taj Mahal Hotel & Oberoi Grand) also came under attack. As news agencies rushed into the spot- reports of more attacks poured in thick and fast and it seemed Mumbai was transformed into a battle-ground. I could not help but remember the live scenes of World Trade Center towers burning on 7/11.

Mumbai has always been the target of terrorists as it is the financial and business capital of the country handling around 50 percent of India’s overall trade and also 48 percent of international arrivals. It is also a favorite with foreign tourists and CEOs of multinational companies much like New York.

As I write this post, I can see live images of hotels burning, commandos exchanging fire and ambulances rushing to hospitals. Till now, there were terrorist attack on 10 places, over hundred people including 7 foreigners and 15 security personnel have died and many people are being held hostage by terrorists at the Oberoi tower. It is reported that around 25 terrorists came by a Vietnam registered boat from Karachi, Pakistan.

Although the Maharashtra government has called in 800 military personnel and 200 special unit commandos (National Security Guards who are the top most commando unit in the country) along with undisclosed number s of Navy commandos, still there is no report of the battle subsiding. Officially the government maintains that there will be no negotiations or talks with the terrorists, but media reports suggest that talks are being held. The government’s efforts are also hampered by the fact that terrorists are holding huge number of hostages who apparently are big shots. And the government must give top most priority for the safe release of them.

May the problem get settled quickly without much harm.