Demand for home loans strong, despite high interest rates

Despite most banks raising their lending rates towards the end of the last financial year, the demand for home loans remains strong. Banks disbursed Rs 7,228 crore of home loans in April, higher by 2.1 per cent, compared to March and 17 per cent higher than the same period last year. According to data released by the Reserve Bank of India (RBI) , growth in bank credit stood at 22 per cent in April, compared with 17.1 per cent in April 2010. Growth in personal loans, which had declined after the global economic slowdown, also bounced back. In April, personal loans grew by 18.4 per cent, compared with 4.4 per cent during the same period last year. Credit towards non-banking financial companies stood at 55.7 per cent in April, significantly higher than 15.1 per cent in April 2010. However, credit flow to the sector fell 0.9 per cent, compared to the previous month. Credit offtake by the commercial real estate sector rose 21.9 per cent in April, compared with a decline of 0.4 per cent in April 2010. While credit flow to the industry and services sector increased, bank advances towards the agriculture sector declined. Credit to the agriculture sector rose 12 per cent in April, compared to the same period of the previous year. Credit flow to industry increased by 25.9 per cent, while that to the services sector rose 24.1 per cent in April, compared to the year-ago period. source: http://www.business-standard.com/india/news/demand-for-home-loans-strong-despite-high-interest-rates-/437387/