Many banks are offering home loans at an interest rate equivalent to base rates. Due to piling up liquidity, the banks are offering loans with a minimal premium above base rate.
Few days ago, Nabil Bank brought a scheme in which it offered bank loans at 7.99 percent. As per the bank, the scheme which matures in seven years period is launched eyeing the upcoming festival season.
Similarly, other banks are also providing home loans equivalent to the base rate. Currently, the base rate of banks has fallen to 8 percent whereas the banks are also providing home loans at 8 percent interest rates.
The banks are charging very low premium rates. Moreover, they are also levying low service charges of 0.75 percent and below. Despite, the home loans have not increased as expected.
According to NRB data, the banks provided home loan of Rs 290 million in the month of Shrawan. The home loans which amounted to Rs 316.08 billion at the end of Ashad increased to merely Rs 316.37 billion in Shrawan.
The data shows that the home loans increased by Rs 37 billion in the last FY. in the FY 2079/80, the banks provided home loans of Rs 279 billion which increased to Rs 316 billion at the end of FY 2080/81. Compared to the amount, the banks issued extremely low home loans during the first month of the current FY.
The central bank has also offered various concession in the Monetary Policy since the last FY to raise home loans. In the Monetary Policy of the current FY, the bank raised monthly installment income ratio to 60 percent in case of home loan up to Rs 5 million. The central bank expected that the increase in home loans will increase demand of construction materials which will help to boost economy.
