HOUSEHOLD LOAN
It’s time that the stock market is made accessible to retail investors without the risk of punting or trading
Households will not, and should not, resort to stock trading as their tool to manage surplus funds. Many retail investors are still unable to deftly book losses and keep the focus on the capital and its protection. They are still product-oriented and care more about the rate of return. When capital loses value, they still find it tough to book a loss and redeploy.
Rajasthan Budget proposes 4 lakh jobs in 5 years
The Rajasthan BJP government, led by Bhajan Lal Sharma, unveiled its 2024-25 budget focusing on jobs, farmers, education, infrastructure, and religious development. Highlights include plans to fill 400,000 job vacancies over five years, interest-free loans for new farmers, free tablets for meritorious students, and a significant budget allocation for tap water in rural areas. Additionally, Rs 100 crore is earmarked for a new corridor at the Khatu Shyam temple, showcasing the government's commitment to multiple sectors across the state.
Budget 2024: Banks seek hike in interest subvention on farm loans
Banks are urging the government to increase the interest subvention on short-term agriculture loans from the current 1.5% to 2%. This move is aimed at helping banks absorb higher costs of funds and boost credit flow to the agriculture sector in the short term. Discussions on this matter took place recently with senior finance ministry officials.
Will it be a 'Congress' budget, GoI?
Budget 2024: No matter how justified, giveaways like farm loan waivers create a moral hazard. While these promises don't affect banks that loaned the money - as GoI picks up the tab - it incentivises non-payment of dues. Those who repaid feel cheated. Together, these factors undermine credit culture. The exchequer adds to its debt burden or is forced to cut back on other spending priorities.
Household debt needs to be kept under watch
"With overall household savings declining to 18.4% of GDP (gross domestic product) in FY23 from an average of 20% of GDP over 2013-2022, and coupled with an increasing trend in financial liabilities, household debt warrants close monitoring from a financial stability perspective," the Reserve Bank of India (RBI) said in its latest Financial Stability Report released on Wednesday.
Savings down, financial liabilities up: RBI says household debt warrants close monitoring
The Reserve Bank of India highlighted rising household financial liabilities post-Covid, with overall savings dropping to 18.4% of GDP in FY23 from an average of 20% between 2013-22. Household debt, driven by increased retail loans, is mostly held by prime credit quality borrowers. Savings are now shifting towards physical assets and non-bank investments.
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Fall in Household Financial Savings actually a worry
The Reserve Bank of India has warned that household debt needs close monitoring due to a decline in overall household savings to 18.4% of GDP in FY2022-23, and an increasing trend in financial liabilities. The share of net financial savings in total household savings has been declining, with 28.5 per cent in 2022-23.
Big US banks withstand Fed's commercial real estate shock scenario
Amid economic uncertainties, the Federal Reserve's stress tests revealed big U.S. banks' resilience to a 40% drop in commercial real estate values. The tests underscored the challenges faced by regional banks and the need for robust risk assessment in the banking sector.
Tips to save money when you have a low income
When income is low, the ability to save is also limited. For savers like Nitin, tax-saving instruments under Section 80C may be the primary way to accumulate savings.
Private banks further consolidate lending market share
These banks including the banking sector leaders such as HDFC Bank and ICICI Bank account for a majority share in service sector credit at 51% in FY24. In retail credit, public and private sector banks account for equal share at 49% each.
Deposits in the time of MFs, real estate
Banks are seeking innovative solutions to rebalance their credit-deposit ratio, with RBI suggesting a review of business strategies. Credit growth is expected to slow down, impacting banks' loan-deposit ratios.
Taking a home loan? 5 ways you can reduce cost of borrowing and save money
The longer the tenure of a loan, the higher the interest burden. Home loan rates will not come down as the RBI has kept policy rates unchanged. If you are planning to buy a house with a loan, ET Wealth suggests some ways to reduce the cost of borrowing.
Should you buy a house now before property prices soar or wait for home loan interest rates to drop?
A favourable wealth effect, driven by a sharp rise in the equity markets, is enticing many first-time homebuy ers to take the plunge, while affluent buyers are looking for second homes. If you are a fence-sitter, still unsure about when to buy a house, this market presents a big dilemma. Is it the right time to buy a house?
Should you buy a house now or rent it? Key factors that will help you to decide
While property market dynamics play a big role in effecting this decision, equally important is your personal financial situation and lifestage. There are other factors to consider. If you are thinking of buying a house, here the key things you need to check.
ITR filing: Compare your tax outgo in old and new tax regime before finalising one for FY24
Sudhir Kaushik of TaxSpanner.com tells readers how they can optimise their tax by rejigging their incomes and investments. TaxSpanner estimates that Vivek Jaiswal can have a surplus of almost Rs.60,000 if his salary is rejigged to include tax-free perks and if he opts for the new tax regime. Here's how
Home loan borrowers may have repaid higher amounts
In FY23, for instance, the combined outstanding home loan portfolio of public sector and private banks and housing finance companies, which account for a big majority of the home loan market in the country was, Rs 3.62 lakh crore. But disbursements were much higher - at Rs 8.08 lakh crore. In terms of growth, while the outstanding portfolio grew 16%, the disbursements expanded 20%, according to the data released by the National Housing Bank.
Dalal St is likely pricing in a Modi 3.0 but election winners already have a bitter household burden
India's stock market hit an all-time high last week, as investors anticipate a third term for Prime Minister Narendra Modi will boost corporate profits. However, consumer debt poses a significant risk. Slow wage growth, high interest rates, and heavy borrowing have strained spending for over 300 million families. Despite this, investors expect post-election growth in private capital expenditure and infrastructure projects
CEA Anantha Nageswaran bats for fresh round of capital market reforms
The CEA pushed for macro and financial stability, stressing that "sometimes it may be necessary to forgo rapid growth opportunities in favour of stability". This will ensure that the country remains on the high growth orbit for a longer period, he indicated. He pointed at the massive spurt in credit in the early part of this century and the subsequent spike in bad loans in the banking assets, which weighed down growth in the second decade of this century.
ADB approves $148 mn loan to improve power supply in Sikkim
The Asian Development Bank (ADB) has sanctioned a loan of USD 148.5 million to facilitate the modernization and improvement of the reliability, quality, and resilience of electricity supply in Sikkim. This initiative aligns completely with Sikkim's Power for All program, guaranteeing uninterrupted, high-quality electricity access round the clock for households, industries, businesses, and the public.
Household savings decline due to rising home, auto, personal loans
Household savings saw a third consecutive decline in FY24, dropping by Rs 9 lakh crore to Rs 14.16 lakh crore by FY23, per MoSPI data. ICRA's Aditi Nayar attributed this to a 73% rise in liabilities during 2022-23. Yet, there's optimism for FY25 as RBI curbs on personal loans may reverse the trend. Chief Economic Advisor Nageswaran highlighted a shift towards real assets.
Jairam Ramesh accuses Modi government of 'Hum Do Humaare Do' policy, draining household savings to cronies
Jairam says, "In nominal price terms, the net household savings is at their lowest in five years. But the reality is that the real household savings are at their lowest since 2014 once we adjust for inflation. This means that for the entirety of the Modi Sarkar's Anyay Kaal, real house hold savings have grown at just 1.1 per cent per year."
Household savings dip over Rs 9 lakh cr in 3 years to Rs 14.16 lakh cr in 2022-23
The net household savings declined to Rs 17.12 lakh crore in 2021-22 and dipped further to a five-year low of Rs 14.16 lakh crore in 2022-23.
Should you fund your wedding with a loan?
She has a stable job at the middle-management level with a multi-national bank. She intends to take a personal loan as she wants to take care of a few of her personal expenses at the time of her wedding. She has some investments in fixed deposits, PPF and tax-saving mutual funds.
How to manage household income
The need for personal funds arises when allocations become acrimonious. Couples have their own personal finance personalities, honed by their upbringing and attitude to money. A portion of household income, even if one spouse is not earning, allocated for personal use with no questions asked, is essential to enable assertion of one’s preferences.
Gold's soaring prices offer investment potential for Indians with household reserves, now a lucrative asset
Gold prices dictate investment trends globally. India's cultural affinity for gold remains strong, with rising prices encouraging more investments. The market dynamics, influenced by import-export regulations and global demand, continue to shape the gold industry.
Alarm bells ringing in economy, households slowly sinking into debt: Congress slams govt
The report states that this "dramatic" fall in savings is due to weak income growth, which explains why both private consumption and household investment growth have remained markedly subdued in 2023-24, Jairam Ramesh said.
Gold retains its gleam as a savings-investments tool — and its allure for personal consumption is growing
An interesting aspect of gold ownership compared to banking account ownership is that while the bottom-of-the-pyramid households put roughly an equivalent amount of their money in both these assets, middle-income and rich households tend to invest bigger chunks of their money in banking instruments and life insurance than gold.
Despite robust GDP growth, why is household spending still sluggish?
Management teams question weak growth despite fast economy post strong GDP release. Factors include investment-led recovery, falling labor share, surplus workers, capital ownership, small businesses, global commodity prices, real estate market, labor market slack, digital payments, Arthur Lewis, Simon Kuznets, India's growth model.
Add glitter of trust to households
GLs enable individuals to access cash using gold as collateral without losing ownership. This shows its vital contribution to financial stability. They are short-term, low-obligation debt where borrowers anticipate future financial resources for repayment. GLs go beyond mere financial transactions. They encompass legacy, emotions, promises and deep-rooted trust. They are more than monetary support. They're a testament to the borrower's confidence and determination to face future challenges, fuelling aspirations in their endeavours.
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