Dena bank home loan india

Dena Bank chairman P L Gairola today said the bank would be disbursing 16 per cent of its loans to the agricultural sector.

Gairola, on a visit to Shirdi, said the bank intended to open an additional 40 branches by March end this year. It presently has 1,150 branches.

The bank which has given loans to the tune of Rs 21,000 crore had lent 17 per cent of the amount to small scale industries and 20 per cent to retail sector, he said.

The bank would set up point-of-sale terminals in two states where smart cards would be distributed among farmers for them to avail agricultural loans, Gairola said. Initially, the scheme would be launched in Akola and Amravati districts in Maharashtra and one district in Gujarat and if successful could be implemented in branches across the country, he said.

Farmers availing the scheme could take loans ranging from Rs 50,000 to one lakh, Gairola said.

In the next two years, core banking will be implemented in 850 branches and will cover 92 per cent of the bank's business, he said.

The bank had also accrued a profit of Rs 248 crore in the last nine months, he added.

State-run Dena Bank has posted a 43 percent rise in its October-December net profit due to robust growth in its net interest income, a senior official said on Wednesday.

The net profit for the quarter was 1.01 billion rupees, compared with 705.3 million rupees during the same quarter a year earlier.

The total income during the period was 8.04 billion rupees, compared with 6.85 billion rupees a year ago.

The provisioning towards bad assets were lower as recoveries were better and fresh slippages were also under control, Executive Director, Bhaskar Sen said.

The bank's net non-performing assets to net advances were 1.41 percent against 2.47 percent a year ago. Fresh slippages were 816.1 million rupees, against 1.27 billion a year ago.

The cost of deposit has gone up by 114 basis points, while the yield on advances went up by 145 basis points, Sen said.

The bank's cost of deposit for the quarter was 6 percent, while the yield on advances was 10.18 percent.

Dena Bank shares ended 27.16 percent up at 65.55 rupees in a firm Mumbai market.

According to Fitch Ratings, Fitch Ratings pn January 4 has upgraded Dena Bank's (Dena) Individual rating to 'D' from 'D/E' and affirmed its ratings, as follows:
- National Long-term rating at 'A+(ind)';
- INR3 billion unsecured subordinated Upper Tier 2 bonds at 'A(ind)';
- INR5bn certificates of deposit programme at 'F1+(ind)'; and
- Support rating at '4'.
Simultaneously, the agency has assigned ratings to the bank's following debt programmes:
- INR4.5bn Lower Tier 2 debt programme at 'A+(ind)';
- INR1.25bn Upper Tier 2 debt programme at 'A(ind)'; and
- INR1.6bn perpetual Tier 1 debt programme at 'A(ind)'.

The Outlook on the ratings is Stable.

The upgrade of Dena's Individual rating reflects continued improvements in the bank's asset quality and profitability. Dena's reported asset quality ratios have improved significantly over the past four years, reflected in the agency's upgrade of the bank's Individual rating first in October 2006 to 'D/E' from 'E', and now to 'D' from 'D/E'. Fitch notes that the operating environment for Indian banks has become increasingly demanding and while this could challenge further improvements in the bank's asset quality and profitability, downward pressures on Dena's Individual rating can be mitigated if the bank maintains its asset quality.

While the bank's asset quality ratios have improved (gross NPL ratio: 3.6% in H108 from 4% in FY07; net NPL ratio: 1.6% in H108 from 2% in FY07), the ratios remain higher than systemic medians (FY07 gross NPL ratio: 2.6%, net NPL ratio: 1%). Dena's National ratings are also constrained by its small size relative to the other government banks as well as its modest capitalisation ratios.

Every year, thousands of people ask themselves the question of how to find the best home loan. Most people would agree that a home loan is one of the biggest investments the average consumer will make in a lifetime. Having the wrong home loan can be expensive, and it can even lead to foreclosure if the payments cannot be made on time. Understanding what the various types of home loans are is the first step to finding the best home loan.

In general, there are seven types of common home loans. There are, of course, unique hybrid loans which can be negotiated, but for the most part home loans will fall into one of these categories:

The Conventional Mortgage: This is a fixed rate loan through a commercial lender for a term of 15, 20, or 30 years. The commercial lender is usually a bank or a mortgage lender. The amount of the monthly payments, the interest rate, and the terms of the loan are locked in by the home loan contract. If the buyer does not have at least 20% for a down payment, these loans require private mortgage insurance, also known as PMI.

ARM or Adjustable Rate Mortgage: In many respects the ARM is similar to a conventional mortgage. What changes in the ARM is the interest rate. While the interest rate for a fixed rate loan will not fluctuate, the interest rates for an ARM will. ARM mortgages adjust up or down, according to the terms of the contract. After the initial term, the interest rate will change periodically according to financial markets. In India many financial bank are offering you the home loans and some of them are: Dena bank, hdfc bank, icici bank etc.

It is important to understand that ARM contracts can vary greatly. You will certainly want to see if the contract includes caps on the level of interest that can be charged. A contract without a cap could lead to disaster.

If you are a looking for a low down payment or no down payment home loan you might want to check out conventional loans. If you have served in the military or are currently in the military you could qualify for a VA loan with no money down along with competitive interest rates.

A option is to shop for a conventional home loan that will offer a wide selection of loans with no money down or low down payments. You can expect that the private mortgage insurance will be added to the monthly payments with any of these loans.

One conventional loan with a zero down payment is Dena home loan. You can even sometimes get all the closing costs included into the loan amount of up to 3 percent of the loan amount. That means that you can exceed the property purchase price by 3 percent.

A problem with financing your home along with closing costs is that you have maxed out the property value and you have no equity in the home. If for some reason you needed to sell your home in the next couple of years you could end up still owing money on the loan if the value of the house dropped. If you can stick with the loan for the long term you will very likely avoid this pitfall.

If you save up money first you are able to reduce your monthly payments. The more money that you have saved the more equity you have and the less interest you will pay. If have at least 20 percent down, lenders will be more confident in lending you money and you are not required to keep private mortgage insurance.

The Reserve Bank of India (RBI) has said that any disorderly adjustments in the global financial markets may result in a sharp rise in interest rates.

This, in turn, will result in an increase in defaults in home loan india portfolios and mark-to-market losses on investments by banks in India.

In its report on trends and progress of banking in India during 2006-07, RBI, said, "Banks are exposed to some degree of market risk in the near term. The major source of such risk is the financial markets. Recent developments in the US sub-prime mortgage market have caused volatility and uncertainty in financial markets."

RBI said while global financial imbalances had eased, they continued to be a cause of concern. Any disorderly adjustments in financial markets could result in changes in interest rates and liquidity shifts. The market risk could crystallise into credit risk in banks' books.

Banking consolidation in the public sector is set to deepen further with the State Bank of India (SBI) seeking to expand its foothold beyond immediate associate banks by possibly absorbing Uco Bank and Dena Bank.

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The Government has, of course, decided to maintain a hand-off approach to the development, but it is learnt that informal consultations are already on among the banks.

"The process of consolidation of SBI with the associate banks has already begun," said a source familiar with the development. In October, SBI absorbed State Bank of Saurashtra within its fold and the process is likely to be completed by the end of this fiscal.

Existing customers are struggling to juggle their finances and other pressing commitments. If things continue at this rate, banks could soon see increased home loan interest rates for bad credit defaulting. If you have taken a home loan interest rates over a short tenure , then it is essential to plan your finances and avoid defaulting.

Online bad credit home loan tenure of 8-10 years is perceived as short tenure. Here, the borrower pays huge monthly EMIs in comparision to a long tenure borrower. Hence, even a small increase of one percentage point, translates into a few thousands of rupees every month. Banks lend money based on applicant's income, job stability, credit history and other forms of savings. It is estimated that a borrower can easily manage repayments if he takes a home loan interest rate that consumes only 30-40 % of salary as EMI. Typically, banks dole out only that amount that it considers you can repay. However, jointly applying for a loan with your spouse or parents who also work increases your loan eligibility. An individual burdened with too many loans, has higher probability of defaulting.

Public sector lender Dena Bank today reduced its interest rates by 0.50 per cent on fresh housing loans in both the fixed and floating interest rates categories.

The reduced rate will be applicable on fresh housing loans sanctioned from October 10 till December 31, 2007, the bank said in a statement today.

In the floating rate category, the new interest rates range from 9.25 per cent to 10.50 per cent while in the fixed rate category, they range from 9.75 per cent to 11 per cent depending on the loan amount and tenure, the bank said.

This festive season your dream home may just be within your reach. The slowdown in retail asset growth and competitive pressure have forced banks to reduce rates on retail loans.

After HDFC [Get Quote] reducing floating home loan rates by 50 basis point, it is now the turn of Axis Bank, which has reduced its floating home loan rates by 50 basis points to 10.50 per cent for existing and new customers

Meanwhile, Dena Bank has decided to cut its lending rates for fresh home loans, by 50 basis points from October 10.

Vasant Vaman More took a slightly complicated route to swindle home-buyers and city branches of leading banks of Rs 1.65 crore but the law caught up with him when he was arrested from his Pune residence last week.

A civil draftsman by profession, More claimed to have constructed at least 10 buildings in the city. Based on his claims, the loans of 30 home-buyers were sanctioned by banks and the pay-orders were deposited in his account.

The Samata Nagar police station registered a case against More in 2003 when he sent home loan-seekers to the Kandivli (E) branch of Dena Bank and pay-orders were deposited in his account.

The bank asked him to return the money after realising his claims were false. More, however, had encashed pay-orders of Rs 18.75 lakh by then. But he returned the amount after a court order.

Second home loans may cost more as some large public sector banks are contemplating a higher interest rate but home loans below Rs 20 lakh are likely to get cheaper, providing relief to the lower and middle-classes.

Similarly, a higher rate of interest for second home loans also appears on the cards, but here again it is the bigger public sector banks, which are believed to be considering such a move.

On second home loans, Kamath said that "as of now, we are not contemplating any increase in rates, but going forward, we may look at it." Smaller public sector banks such as Central Bank, Dena Bank and the south-based Indian Bank, which cater to small ticket loans, said that they may have no need to raise rates on second home loans since they do not receive many such applications.

Dena Bank's Executive Director U S Kohli, said that since the bank had not revised upwards its rates the last time, "there is no question of reducing rates below Rs 20 lakh." Second home loans, too, were not of much concern to smaller banks since the majority of their loans ae in the range of Rs 5-10-lakh. "Ninety per cent of our loans are in the Rs 8-10-lakh range," Bank of Maharashtra's Chairman and Managing Director M.D. Mallya said.

Mallya, however, said that going forward the bank might consider reducing its rates below Rs 20 lakh. "We may review the issue at our next asset-liability committee (ALCO) meet," he said.

K. Cherian Varghese, Chairman and Managing Director of Corporation Bank, believes that information technology has helped the bank take care of a large volume of transactions. In the near future all transactions in the bank will be supported by IT, he told Ravi Sharma in an interview.

We have tied up with the Oriental Bank of Commerce, Andhra Bank, Karnataka Bank, Dena Bank and Bank of Rajasthan for the use of our 511 ATMs by their customers. Each transaction earns us a fee.

The home loan sector is one. There is still a high, unsatisfied demand for housing loans. We grew by 120 per cent in this sector last year. We are also focussing on offering value-added products, such as Corp junior account (where money can be easily transferred from one account to another in the same branch).

The principal repayment you make on your home loan is eligible for income deduction under Section 80 C. The principal is the actual amount you borrow from the home loan company and does not include the interest payments. Incidentally, registration and stamp duty also fall under this limit.

Let's say that your taxable income is Rs 1,00,000 and you repaid the home loan principal of Rs 40,000. Your taxable income drops to Rs 60,000 (Rs 100,000 - Rs 40,000). The maximum deduction allowable under Section 80 C is Rs 1,00,000.

A From any recognised lender. This could be a housing finance company like HDFC, LIC Housing Finance, GIC Housing Finance and Dewan Housing Finance. Nationalised banks like Corporation Bank, Dena Bank, Vijaya Bank and Bank of India too offer home loans.

Eicher Tractors has entered into an agreement with Dena Bank for retail financing of tractors to farmers. Under the agreement, farmers would get a number of benefits including cheaper loans.

Against the norm of 15-25 per cent margin money for tractors, Dena Bank would finance tractors manufactured by Eicher with lower margin money of 5 per cent for loans up to Rs 2 lakh and 10 per cent for loans over Rs 2 lakh and up to Rs 5 lakh.

Even the land holding requirement has been reduced from existing 8 acres of perennially irrigated land to 4 acres of perennially irrigated land and the loans are being provided for 7-9 years tenure.

The scene of bad loans in India is not as alarming as in the US. According to O P Bhatt, Chairman, State Bank of India, the incidence of bad home-loans was about 3-4%, or about 0.5% higher than earlier.

In the US, this problem is mostly accentuated in the subprime mortgage market. Financial institutions in the US took the subprime, or loans lent below the prime-lending rate, route to increase their loan base. Now, with interest rates rising, bad loans are on the rise. This has resulted in a rise in delinquencies.

Off these, six are in the public sector space while one is from the private domain. They include the likes of Dena Bank, Union Bank of India, Indian Bank, Central Bank of India, Allahabad Bank, and ICICI Bank.

Keeping open the option to acquire a smaller PSU bank, Bank of Baroda said today it will tap the markets to raise about Rs 1,000 crore this fiscal to fund its expansion.

"We will go for a public offer this fiscal. The government holding in the bank is slated to come down to nearly 51 per cent from the present 67 per cent," BoB chairman P S Shenoy said here today.

The bank's share price is hovering at about Rs 185 in major bourses.

Referring to the international Basle-II norms, he said the bank's capital adequacy ratio may come down from 14 to 9.5 per cent after providing for operational and market risks as per the new norms.

So, BoB has to tap the market to raise additional capital worth about Rs 1,000 crore to increase its CAR and sustain its growth momentum.

Most people would find housing loans eating into their salaries month after month. But across the city, conmen are increasingly finding ways of applying for these loans and minting money.

The Mumbai police have cracked more than five cases in the past few months where major banks have been duped of crores by cheats, using fake documents and identities. The latest is Andheri's Dena Bank, which was defrauded of Rs 14.3 lakh by VSNL employee Shripad Lad (48) and a political worker, Noman Shaikh (30).

Subsequently, senior officials from Dena bank reached Mulund to inspect the property against which Lad had taken the home loan. To their surprise, the apartment at Vaishali Nagar did not exist.

You are eligible if:

· You are a major individual, resident or non-resident, having a regular source of income.

· Your age on the maturity of the loan is less than retirement age if you are a salaried employee & below 65 years, if you have a business.

· The total deductions do not exceed 60% of your gross income, including the loan installment of the proposed loan.

· Spouses/Co-applicants income can be clubbed for enhanced eligibility.

Loan Amount:

· Up to Rs.100 lakhs for the purchase of a house.

· Up to Rs.5 lakhs for renovation/upgradation.