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YES Bank to Enter Home Loans Segment

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YES Bank to Enter Home Loans Segment

Last updated: November 5 2014
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  • YES Bank to Enter Home Loans Segment

    YES Bank enters home loan business
  • #2

    #2

    Re : YES Bank to Enter Home Loans Segment

    https://www.retaillending.com/conten...-loan-business

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    • #3

      #3

      Re : YES Bank to Enter Home Loans Segment

      More the merrier.

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      • #4

        #4

        Re : YES Bank to Enter Home Loans Segment

        Will they create a rate war like they did for Savings account holders..offering 7%
        So now home loans at 9% from yes bank ? They can capture market then..

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        • #5

          #5

          Re : YES Bank to Enter Home Loans Segment

          They are aggressive and creative at whatever they pick, savings account with higher interest rate, NRE/NRO accounts with higher rate, extra paise rates with international remittances ... Hope this one turns out to be good too!

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          • #6

            #6

            Re : YES Bank to Enter Home Loans Segment

            Originally posted by contactbrij View Post
            Will they create a rate war like they did for Savings account holders..offering 7%
            So now home loans at 9% from yes bank ? They can capture market then..
            Highly unlikely. Remember unlike SBI/HDFC these banks have low deposits (casa) from the general public. Once RBI freed interest rates on savings accounts, these banks took the chance to raise money cheaply from the general public.

            Obviously if your cost of funds is higher than a sbi/hdfc ( 4% on savings accounts, vs 6-7% for the new age banks) it would be suicide to undercut on loan rates.

            Remember the interest rate are linked to the bank base rate for all borrowers. Reducing the base rate will benefit all borrowers.. Which will be too costly for the bank if the intent is to target only home loans.

            The spreads (mark up) on the base rate for home loans are at 0.10-0.15%. Even a reduction of 0.05% in the spread will lead to a savings of rs 2500 per year on a loan of rs 50 lacs. Not very impressive
            Last edited November 5 2014, 06:22 PM.
            Life is what happens when you are making other plans. Enjoy it

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            • #7

              #7

              Re : YES Bank to Enter Home Loans Segment

              Originally posted by Que Sera View Post
              Highly unlikely. Remember unlike SBI/HDFC these banks have low deposits (casa) from the general public. Once RBI freed interest rates on savings accounts, these banks took the chance to raise money cheaply from the general public.

              Obviously if your cost of funds is higher than a sbi/hdfc ( 4% on savings accounts, vs 6-7% for the new age banks) it would be suicide to undercut on loan rates.

              Remember the interest rate are linked to the bank base rate for all borrowers. Reducing the base rate will benefit all borrowers.. Which will be too costly for the bank if the intent is to target only home loans.

              The spreads (mark up) on the base rate for home loans are at 0.10-0.15%. Even a reduction of 0.05% in the spread will lead to a savings of rs 2500 per year on a loan of rs 50 lacs. Not very impressive

              Agree. I think they would be in segment with higher rates like some of NBFC like Indiabulls etc and obviously their target segment would be different. I don't think they would make any worthwhile recognition in this different segment with higher price nor can they compete with institutions like HDFC, ICICI and SBI. I feel that they just want their little pie of business making not much effect in the market.

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