HDFC to hike housing loan rates
Mumbai: Signalling the end of good times for consumers a number of institutions led by HDFC are hiking their home loans rates.

Deepak Parekh HDFC's chairman has announced that HDFC (Housing Development Finance Corporation) will hike interest rates on its home loans after Diwali by 50 basis points. Explaining the rationale behind the move, Parekh said that inflation was higher and bond prices had gone up by 200 basis points during the past few months. Besides, interest rates were being hiked worldwide, too.

Other banks and financial institutions are expected to follow suit and are likely to convene their asset liability committee meetings shortly.

According to V Vaidyanathan, senior general manager and head (Retail Products), ICICI Bank, "We are also thinking about reviewing our home loan rates. But we haven't decided to what extent we may want to raise it."

However, State Bank of India, the country's biggest commercial lender, may not raise home loan rates in the immediate future. A K Purwar, chairman, SBI conceding that there was upward pressure on interest rates said, the bank was examining various issues. SBI has, however, decided to increase its short-term deposit rates.
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Planning Commission supports consolidation among banks
New Delhi: The Planning Commission has supported the consolidation process in the banking sector and has recommended to prime mininster Manmohan Singh, that having five or six public sector banks (PSBs) is better than the 27 PSBs at present.

Finance minister P Chidambaram had already said that there would be major consolidation in the banking sector in the next few years.
To mark a beginning, Union Bank and Bank of India have already decided to merge.

To make the Indian banking industry globally competitive, the government wants to merge one strong bank with another, instead of merging a weak bank with a strong bank.
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IDBI net drops 6 percent in Sept qtr
Mumbai: Industrial Development Bank of India (IDBI) recorded a 6.25 per cent drop in net profit in the July-September 2004 quarter to Rs117 crore from Rs125 crore in the corresponding quarter a year ago.

The decline in net profit was because of a 11.10 per cent fall in income to Rs1,529 crore during the quarter from Rs1,720 crore.

IDBI, which converted itself into a bank under the Companies Act from with effect from October 1, reported a net profit of Rs465 crore for the extended 18-month accounting period ended September 30, 2004, on Rs9,704 crore of income from operations.
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