Archive for March 1, 2009

Book loss to benefit

Publication: Business standard, Mumbai; Date: March 22, 2009

Last April, Rajeev Sharma (name changed) sold his property for a short-term capital gain of Rs 50 lakh. Realising that his taxation will be quite high, he decided to invest some money in the dwindling stock markets.

As a result, he invested Rs 30 lakh in mutual funds in May. He sold his holdings for a mere Rs 10 lakh in October. So, he had a short-term capital loss of Rs 20 lakh. He then entered mutual funds at much lower levels. Here’s how his numbers worked out.

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Shopping for a Loan?

Publication:  Business Standard, Mumbai;   Date: March 8, 2009;

A comparison of some of the interesting rates on offer.

State Bank of India, the country’s largest bank, locks home loan rates at 8 per cent for the first year…Canara Bank freezes home loan rates at 8.25 per cent for the first year and 9.25 per cent for the next five years…

Public sector banks (PSBs) have offered rates of 8.5 per cent for loans up to Rs 5 lakh and 9.25 per cent for loans between Rs 5 lakh and 20 lakh. These loans come with a free life insurance and no processing fee…

With the Reserve Bank of India (RBI) reducing the reverse repo and repo rates by another 50 basis points, there could be more such rate cuts. Repo is the rate at which RBI lends short-term funds to banks. Reverse repo is the rate at which RBI borrows from banks.

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Switching lenders: Does it make sense?

Publication: Business Standard, Mumbai;   Date: March 1, 2009                  

Take a decision based on the remaining tenure, penalty and processing charges.

In the last five months, the Reserve Bank of India (RBI) announced four rate cuts, primarily to ease the liquidity crisis that has besieged the financial markets. These cuts have encouraged the public sector banks to slash rates. For instance, State Bank of India (SBI), the country’s largest bank, recently froze its home loan rate for one year at 8 per cent. This is applicable for loans taken before April 30.

LIC Housing Finance is giving home loans at 8.75 per cent interest rate for loans less than Rs 10 lakh. There is also a 0.25 per cent discount for customers, who have investment-oriented LIC policies (unit linked insurance plans), with a sum assured of Rs 15 lakh and more. All these point to the fact that, at least in the short term, loan rates are softening.

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