Write Comment     |     E-Mail To a Friend     |     Facebook     |     Twitter     |     Print

NEW DELHI: In a development that will cheer thousands of homeowners who have availed of loans from any of the 54 housing finance companies (HFCs), the National Housing Bank (NHB) has banned the levy of pre-payment penalty.
 
The NHB, which is the housing finance regulator, has also asked HFCs to ensure that all borrowers pay the same interest rate, irrespective of when the loan was taken. The two decisions, notified on Wednesday, will cover all HFCs ranging from HDFC to LIC Housing Finance and Dewan Housing Finance. They come into effect immediately, NHB chairman & managing director RV Verma told TOI.
 
By notifying the new rules, the NHB has initiated a step that the Reserve Bank of India has been contemplating for a while. Although the banking regulator has discussed the issue with banks and ombudsmen, it is still to notify the norms.
 
As a result, only 33% of the Rs 5 lakh crore housing finance market will benefit from the NHB’s decision.
 
The housing finance regulator said HFCs will no longer levy any fee on floating rate loans. In case of fixed rate loans, it has made a distinction and only those borrowers who pay from their "own sources", such as savings or even loans from relatives, will be exempted from payment of penalty. In case borrowers shift to another bank or HFC, the penalty will be applicable.
 
While a similar advisory was issued last October, the NHB has said that any violation will attract penal action. The move will enable several borrowers to now shift their loans to banks or HFCs that offer home loans at a lower rate. Banks and HFCs levy pre-payment penalty of up to 4%, which often resulted in borrowers continuing to pay higher rates. "The idea is to protect the interests of borrowers. It will give them freedom to exercise their choice," Verma said. HFCs, however, refused to comment on the issue, saying they were studying the matter.
 
On uniform interest rates, the NHB’s letter was in the nature of an advisory and did not talk of any penal action for violation. "It is accordingly advised that HFCs should ensure uniformity in rates, on floating rate basis, charged to their old and new customers, with the same risk profile irrespective of the time of entry of borrowers in the market," the letter said.
 
Banks and HFCs have long argued that they were earlier offering loans at a discount to the prime lending rate and argued for the continuation of the differential rate regime. But with the advent of a base rate system, under which lending below the benchmark rate is not allowed, the system is being changed.

---------------------------------------------------------------------------------------------------

NEW DELHI/MUMBAI: The urban agglomeration (UA) of Delhi has for the first time overtaken that of Mumbai, a TOI analysis of just-released census data shows. Close to 22 million people now live in Delhi’s extended urban sprawl, while Mumbai’s sprawl is home to just under 21 million.
 
The census defines a UA as "a continuous urban spread constituting a town and its adjoining outgrowths". However, while the census office uses data across districts to designate an urban agglomeration, it does not go across state lines, leading to a misleading situation in which the Delhi UA does not include several major satellites.
 
TOI added Noida, Greater Noida, Ghaziabad, Gurgaon and Faridabad to the Delhi UA population to arrive at a figure of 21.7 million people in the capital’s UA. It is these satellites, in fact, which tell the real story because some of them more than doubled their numbers in the past decade, driving Delhi’s explosion.
 
Mumbai UA’s population in 2011 stands at 18.4 million, according to the latest census data, and even if satellite areas that are not included-like Vasai-Virar, Panvel, Bhiwandi and Navi Mumbai-Panvel-Raigad-are counted, the financial capital’s UA still adds up to 20.7 million people.
 
If relatively the same satellites are added to 2001 data, the Delhi UA was still smaller than Mumbai a decade ago-15.5 million to Mumbai’s 16.6 million-showing that the change has taken place in the last 10 years. Kolkata was listed by the census in 2001 to be the second biggest Indian UA with 13.2 million people; in fact it was the third biggest city both then and now. The Kolkata UA now has 14.1 million people.
 
The big three-known as " megacities" since they have populations of over 10 million-remain a long way ahead of the rest of India’s big cities. About 15% of India’s total urban population lives in these three cities alone. But along with the rest of the country, population growth is slowing down in these cities too, more so for Kolkata and Mumbai. Delhi is also slowing down, but it still added over 5 million people-a third of its 2001 size-in the past 10 years.
 
The Chennai UA, which remains the fourth biggest, is less than half the size of Mumbai or Delhi. The Bangalore UA has knocked Hyderabad off the fifth position and is now almost as large as Chennai; 8.5 million to Chennai’s 8.7 million, closing a gap of almost a million that existed in the last census.
 
S Parasuraman, director of the Mumbai-based Tata Institute of Social Sciences, attributed this to the "economic activities in these centres. They have improved significantly". Comparing the cost of living in Mumbai and Bangalore, he said, "The cost of a house in the heart of Bangalore is the same as the cost of a similar-sized house in Dombivli on the outskirts of Mumbai."
 
Overall, there are now 53 cities of million-plus people as compared to 35 in 2001 and 43% of India’s urban population lives in them. Among the new cities on this list is Srinagar, Jammu and Kashmir’s first million-plus city. Rapidly urbanizing Kerala has added six new million-plus cities to Kochi, its only such city in 2001, and Jharkhand now has three where it had none. Orissa, on the other hand, has not a single million-plus city, like the entire north-east.
 
More than a quarter of a billion people live in just 468 Indian cities known as Class I cities, each having a population greater than 1 lakh.