ICICI Prudential Launches P . H . D . Fund
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Staying Ahead Of RBI Rate
Several banks raise their deposit and lending rates following the central bank ’ s announcement
On June 6 , the Reserve Bank of India ( RBI ) raised the repo rates by 25 bps , the first hike in nearly four-and-a-half years . However , it is too early in the day to say how interest rates will pan out going ahead . “ As of now it looks like there could be another 25 bps rate hike ,” says Shanti Ekambaram , President , consumer banking , Kotak Mahindra Bank . Rising interest rates on loans : “ As a direct impact of RBI ’ s latest policy change of increasing key lending rates by 25 BPS , we will expect an upward revision in home loans and other retail loans ,” says Ramesh Nair , CEO and Country Head , JLL India . SBI , ICICI and HDFC all raised their lending rates even before the change in rates were announced by RBI while other banks followed soon after the policy announcement . Syndicate Bank revised its marginal cost of lending rate ( MCLR ) and raised the rates for its one-year tenor by five basis points to 8.55 per cent , while making no changes to the other interest rates . The MCLR is considered to be the standard lending rate , lower than which no lender is allowed to give loans , except in priority sectors . Axis Bank has also revised its
MCLR from 8.5 per cent to 8.6 per cent , becoming the latest entrant in the process . Andhra Bank , which is a government operated bank , also raised its MCLR-based lending rate last week by 5 bps to 8.55 per cent . “ We are yet to see if the revisions will impact the ongoing home loans , but the new loans will be dearer than before ,” adds Nair . New borrowers do not have much choice in this regard . In case of a new loan , even a 15 basis points increase can make a difference . Consider a loan of `40 lakh for 20 years at 8.5 per cent interest . The monthly EMI would be `34,713 , and the total interest payable is `43,31,103 . If the loan is at an interest of 8.65 per cent for the same tenure , the total interest payable is `44,22,467 , an excess of `91,364 .
Home loan borrowers can consider the following options
Those at the beginning of their loan tenure : Minimise the impact by making a pre-payment that would lower your overall interest outgo . In the earlier example , if you prepay `2 lakh at the end of two years , you will save `6,44,954 even as your tenure comes down by almost two years . Those nearing the end of their loan tenure : It is wise not to take any steps and simply maintain the loan till the end of its tenure to collect any tax deductions . Rising deposit rates : Most banks had pre-empted the move and hiked deposit rates in May end or June beginning .
Anagh Pal
ICICI Prudential Launches P . H . D . Fund
ICICI Prudential has launched a Pharma Healthcare and Diagnostic ( P . H . D ) Fund with the aim of tapping into a wide spectrum of pharmaceuticals , diagnostics and health-related sectors . The open-ended equity scheme will invest in equity and equity related securities of companies dealing in pharmaceutical , healthcare , hospitals , diagnostics and wellness . The new fund offer opened on June 25 and will close on July 9 , 2018 . The minimum application amount is `5,000 and in multiples of `1 thereafter . There is no entry and exit load for the first 18 months , after which one per cent will be charged on exit load .
“ The recent underperformance of pharma stocks makes a strong case for investing in this sector now ,” said Nimesh Shah , Managing Director and Chief Executive Officer , ICICI Prudential Asset Management . The fund , which will be traded in S & P BSE Healthcare Index , is bullish about the positive developments in the sector . The fund seeks to capitalise on investment opportunities and hopes to improve earnings in the next few quarters . “ We expect this upward trajectory of earning to continue and the trajectory will be better than what we have seen in the last three years ,” Yogesh Bhatt , Senior Fund Manager , Equity at ICICI Prudential Asset Management Company , said .
M Rajendran
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Outlook Money July 2018 www . outlookmoney . com