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Raghuram Rajan assures India’s economic reforms are in right direction

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Davos: Referring to some of the obsolete regulations that are currently in place, RBI Governor Raghuram Rajan said, “Economic reforms in India are going in the right direction but the level is wrong.”

In a television interview, Rajan said, “Well let me put it this way, the direction is the right one but the level is wrong. We have too much of the wrong kind of regulation.”

“So we do need to hack away at this, and it will take time, it doesn’t happen overnight. We are doing it and do recognise that we overregulated. That business needs a better environment,” he observed.

“At the same time, there is a whole set of new business coming in that we have to find ways to deal with an example, online lending. How do we do with what happens in a downturn?” Rajan said.

He was responding to a question on economic reforms in the country.

Rajan bitterly regretted that people tend to talk only about big ticket items, but not the other reforms that are currently being undertaken.

“Well, I think one tends to focus on the big iconic items like in India there’s now a goods and service tax which is likely to unify the country. That’s stuck so far in some Parliamentary discussion between the opposition and government. Hopefully, it will be done sooner rather than later. But really there’s a lot going on the ground which is less obvious, “he said.

“For example, last week the Prime Minister inaugurated a programme called ‘Start Up India’ which is about really eliminating the bureaucratic hurdles of starting a new business. New business had to register with 10, 15, 20 different authorities including the pension fund,” Rajan said.

“You have one employee why do you need a pension fund at this point? So the idea here is to make it simpler to start, but also remove the inspections. For three years no inspectors would show up. You self-certify what you did,” he said, adding that these kinds of reforms are really building on each other.

“And there’s a very vibrant private sector in India also which is taking off. Internet market places, fantastic new development because what India doesn’t have is cheap land. You can’t build retail stores everywhere.

“But if you build a virtual warehouse with warehouses performing the role of you now, storing goods. You can connect small town households to the big market. And you can connect small town manufactures again to the big market,” he said.

Responding to another question, Rajan said he is not worried about Chinese economic slowdown.

“In terms of the quantity of growth, there’s still a lot of growth coming from China in terms of dollars. Of course, percentages are falling all the time. That is natural to be expected of an economy which is growing richer and therefore which is going to slow,” he said.

“So I’m not excessively worried about Chinese growth,” Rajan said.(Inputs from agencies)

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Say Goodbye to Heavy EMIs – Opt for Flexi Hybrid Home Loan

With pre-approved offers from Bajaj Finserv on a gamut of loans including business loan, personal loan, etc., availing finance is easy and quick.

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Home Loan
Say Goodbye to Heavy EMIs - Opt for Flexi Hybrid Home Loan.
  • Flexi Hybrid Home Loan allows paying only interest as EMI
  • Principal holiday period of 4 years
  • The principal and interest after 4 years paid only on the amount utilised
  • Flexibility of flexi-interest and flexi term loan in a single loan

With the Reserve Bank of India (RBI) hiking repo rates in its bi-monthly monetary policy review by 25 bps, interest rates of several loans have already started tightening. Though aimed to control inflation, it’s anticipated that home loan borrowers will bear the brunt of the latest move by the apex bank.

Hike in repo rate would push up home loan interest rates and subsequently the EMIs. The move might be a dampener if you are a first-time home loan borrower. However, with Bajaj Finserv Flexi Hybrid Home Loan, not only do you get the requisite funds to buy your dream home but are also relieved of heavy EMIs. Read on to know more.

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In this 21st century building a home is not everybody’s piece of cake but there is always a way for a will hence home loans provide you the way to own a house. Pixabay

Payment of only interest component as EMIs

A regular home loan, on a fixed interest rate, taken from a financial institution consists of the interest and the principal component. During the entire loan tenor, the EMI remains constant. Though the interest and the principal ratio varies during the loan tenor, the EMI remains fixed.

However, with Bajaj Finserv Flexi Hybrid Home Loan, during the initial tenor, you pay only the interest as the EMI and nothing for the principal. The principal holiday period, where you need not pay anything towards the principal, lasts up to 4 years. Only after 4 years, the EMI will constitute the principal and the interest component.

So, for instance, if the EMI of your home loan is Rs.30,000, with the interest component amounting to Rs.20,000, during the initial 4 years, you need to pay only Rs.20,000. Only after 4 years, you need to pay the principal component of the EMI. This not only reduces your EMIs but also help you better manage your finances. Also, during the interest-only period, there’s no reduction in the loan limit.

Principal and interest only on the amount utilised

Unlike a regular home loan where you need to pay interest on the entire loan amount disbursed, in case of Flexi Hybrid Home Loan, after the principal holiday period of 4 years for the balance tenor, the EMIs would consist of the principal and the interest – only on the amount utilised from your approved loan limit and not on the entire limit.

For instance, if your approved limit is Rs.25 lakh for a tenor of 15 years, and you use only Rs.20 lakh from this limit, after the principal holiday period, from fifth year onwards, you need to pay the principal and the interest only on Rs.20 lakh. This further brings down the EMI and helps in savings in the long-run.

High EMIs – No longer a hurdle

Thus, with a Bajaj Finserv Flexi Hybrid Loan, high EMIs are no longer a hurdle in purchasing your dream home. Irrespective of hike in home loan interest rate, following RBI’s move, this new and innovative home loan offering helps you buy your dream home with utmost ease.

Home Loan
You need to know we can get the loan for various purposes. Pixabay

Even if you are early into your career, where generally income levels are low, you can go on and address the crucial life goal of buying the home of your choice. The principal holiday period of 4 years not only keeps your EMIs low but also ensures you are able to take care of day-to-day expense of running a household. Apply for home loan today and enjoy the joys of owning your own home.

With pre-approved offers from Bajaj Finserv on a gamut of loans including business loan, personal loan, etc., availing finance is easy and quick. No long queues and lengthy paperwork. Just share a few basic details to know your pre-approved offer within seconds.