Skip to main content

Will housing loan from any bank really guarantee peace of mind?

As a common misconception, we believe, taking loan for a property is sure to enable us buy a genuine property free of litigations as the bank would verify all the legal credentials of the property. We need to think again on that.  Non-performing asset ratio for a bank shows those loans which are not giving returns to the bank. They comprise a variety of loans including housing loans. A better approach for selection of a bank for housing loan will be to select a bank which has a low Non-performing asset ratio. A comparison of banks in this regard is given below.


Non-performing asset ratio: The net NPA to loans (advances) ratio is used as a measure of the overall quality of the bank's loan book. An NPA are those assets for which interest is overdue for more than 90 days (or 3 months). Net NPAs are calculated by reducing cumulative balance of provisions outstanding at a period end from gross NPAs. Higher ratio reflects rising bad quality of loans. 

Source Data: Equitymaster research

The NPA ratio is one of the most important ratios in the banking sector. It helps identify the quality of assets that a bank possesses. If we look at the chart below, we can clearly see a differentiation between India's largest banks. A bank such as ICICI Bank would garner one of the highest NPA ratio amongst private banks on the back of its aggressive nature. As the banks lends out strongly to customers, the chances of them defaulting also rises. Plus, considering that private banks charge higher interest costs would only make things more difficult for its customers. At the same time, the NPA ratio of a relatively much conservative bank such as HDFC Bank would remain low. It is clearly evident from the above chart. The marginal spurt in this ratio during FY09 is due to its acquisition of Centurion Bank of Punjab.

Further, Axis Bank has done well in the recent past to bring down its NPA ratio. So is the case for Bank of Baroda (BoB). PNB has done well to keep its NPA levels low as well. As for India's largest bank SBI, its NPAs are relatively much higher than that of its PSU peers. This can also be attributed to its aggressive period over the past few years.

Ref:

Comments

Popular posts from this blog

Future of oil is bleak. By 2030, 95% of people may not own private cars which would wipe off the automobile industry

A futurist and clean energy expert, Toni Seba, has predicted that electric vehicles would destroy the global oil industry after a decade. By 2030, 95% of people won't own private cars which would wipe off the automobile industry, he says.

Boeing and JetBlue Airways have announced they would begin selling a hybrid-electric commuter aircraft by 2022. Planned by start-up Zunum Aero, the small plane would seat up to 12 passengers and reduce travel time and cost of trips under 1,600 km.

Ref http://auto.economictimes.indiatimes.com/amp/news/oil-and-lubes/the-future-of-oil-is-almost-here-and-it-doesnt-look-very-pretty/60972841

Can Herbalife 'Afresh' cause insomnia(sleeplessness) and heart problems?

Here is another "great" product from Herbalife. Marketed as an ENERGY drink mix. Few people know it contains Gurana seeds which have no active compound giving artificial energy other than caffeine. Afresh also contains additional caffeine

Ingredients of Herbalife Afresh Energy Drink Mix:
Maltodextrin, Orange Pekoe Extract, Guarana Seed Extract, Acidity Regulator - 330 and Caffeine Powder.

http://mall.coimbatore.com/bnh/herbalife/afresh-energy-drink-mix.htm

http://products.herbalife.co.in/energy-and-fitness/afresh-energy-drink

Side effect include insomnia, sleeplessness and heart problems, It is especially harmful for people with High blood pressure.

http://www.medicinenet.com/caffeine_tablets-oral/article.htm

PPF interest rate cut to 7.9% but are other investment options better? Here's a comparison

The Public Provident Fund (PPF) will now offer 7.9% but experts say it is still a good option for investors. Given that consumer inflation is down to 3.65%, the real rate of return of the PPF is a healthy 4.25%. 

"This is quite impressive for an option that offers assured returns," says Amol Joshi, Founder, PlanRupee Investment Service. "Investors should continue to take advantage of this long-term tax-free product," he adds. 

Even if you compare the PPF rate with the 10-year government bond yield, the scheme is attractive. "The 10-year bond yield is a better benchmark for PPF than consumer inflation," says Manoj Nagpal, CEO, Outlook Asia Capital
Currently, the 10-year bond yield is around 6.8% and the PPF at 7.9% makes it for a premium of 110 basis points. "Historically, the average premium has been around 75 bps. So, the PPF investor is today earning a higher real return," says Nagpal. Even so, some investors may be feeling disappointed by the cu…