by Moiz Mannan
Non-resident Indian (NRI) money is pouring into bank accounts and deposits in banks in India. The volatility of the Indian rupee and certain attempts by the Indian planners to shore up its value have combined to present unprecedented earning opportunities for Indians living and working outside the country. The going has become even better now with a flurry of ‘festive offers’ in India for NRIs.
With real estate inventories swelling up with developers and builders and liquidity rising sharply with Indian banks, it is not surprising that real estate sellers and banks are both offering mouth-watering deals to those with foreign currencies in their pockets.
Global consultancy Jones Lang LaSalle (JLL) India has averred that real estate is a better option for NRIs to invest rather than high-yielding bank deposits. One of its top officials was quoted by the media recently as saying that in the firm’s observation of the last two decades, NRIs have been losing out when they put money in such bank deposits during volatile times.
They have missed out on overall capital returns, because the perceived benefits of high interest rates are actually eroded by the depreciating rupee.
The experts are confident that over the long term, well-picked properties surely yield multi-fold returns that are higher than any other asset class. Obviously, the timing has to be right and people have to seek out the troughs. A JLL report earlier said prices of residential properties are set to fall because of rising inventories across India’s big cities.
The number of unsold flats in metropolitan cities such as Mumbai, Delhi and Bangalore are near a record high, nearing the 2007 levels — the year when the US sub-prime crisis led to a global collapse in housing activities. JLL said developers in Mumbai were sitting on inventory of 48 months, while Delhi and Bangalore real estate inventory was at around 23 months and 25 months, respectively.
Nearly all major banks and financial institutions are now queuing up with promises to make the forthcoming festive season sweeter for non-resident Indians in particular. They are offering anything from lower interest rates on home and personal loans, concessions in documentation fees, preferential rates on foreign currency conversion and assistance in property searching to discounted medical procedures.
The newest offer has come from ICICI Bank , the country’s largest private sector lender. The bank is offering a preferential rate on foreign currency conversion, giving special offers on housing loans and providing assistance for searching properties.
Also, non-resident customers of the bank can avail of as many as 77 medical tests at a discount; their family members can open no-minimum-balance savings accounts with the private lender.
ICICI Bank would charge a flat processing fee of Rs 5,000 on home loans up to `7.5m and `10,000 on housing loans exceeding `7.5m. The bank also has a referral arrangement with its arm ICICI Home Finance Company, which provides property search facilities in India.
ICICI Bank has also tied up with a clinical diagnostic laboratory, to offer customers special discounts on preventive health check-ups. For a limited period, the bank’s non-resident customers can also avail of a range of preferential rates on foreign currency conversion at select branches in India. The rates would vary, depending on the currency and the amount to be converted.
Public sector giant, Punjab National Bank has announced a series of new schemes with the onset of festival season for retail Loans by way of offering full waiver of processing fee on Housing, Car, Two-Wheeler and Personal Loans for purchase of Consumer Durables. Further, Rate of Interest on Car Loans slashed to 10.65 percent on fixed basis, rate of interest on two-wheeler loans slashed to 12.25 per cent on fixed rate basis and ROI on personal loans for purchase of consumer durables slashed to 12.75 percent on fixed basis. These rates are lesser by one to 2.50 per cent from the existing floating rates.
The bank has also introduced two special schemes for NRIs, i.e PNB Global Foreign Currency Deposit and Scheme and Rupee Deposit Scheme. Under these Schemes, NRIs are entitled to following additional. benefits/concessions if a certain minimum deposit is mmaintained.
Indiabulls Housing Finance Ltd (IBHFL) has unveiled a special festive home loan offer at 10.25 per cent, for the ongoing festive season.
This offer is applicable for all new sanctions till November 30 and first disbursement availed by December 31 this year.
Another public sector heavyweight, Canara Bank has also recently launched two new housing schemes for NRIs and High Networth Individuals (HNIs), in a bid to cash in on the festive fervour.
Home loans of up to Rs 30 lakh would be available to an NRI at the base rate of 9.95 per cent, while loans in the bracket of `3-7.5m will be available at a rate of 10 percent.
Loans of above `7.5m would attract `10.20 percent. Bank of India has also introduced festive offers on home loans, vehicle loans and consumer durables during the festive period.
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