“We have given show-cause notices to 20 private and public sector banks as also IBA on the prepayment penalty issue. In the notice, we have said that CCI has found them guilty for cartelizing and fixing penalty rates for consumers who foreclose their loans,” said a CCI official, who did not want to be identified.

The official also said CCI has found substantial evidence that banks are colluding to fix penalty.

According to him, State Bank of India, LIC Housing Finance Ltd, Deutsche Postbank Home Finance Ltd, Housing Development Finance Corp. Ltd and HDFC Bank Ltd are some banks that have been sent notices. They could not be immediately reached by Mint for a comment.

Mint had on 9 November said these companies were being probed. Responding to Mint’s query, LIC Housing Finance director and chief executive R.R. Nair had then said, “We said (in the reply to the CCI) that the prepayment charge is necessary because we borrow money factoring in the period of the loan. A 10-year loan is more expensive than a one-year loan and we borrow according to our asset-liability balance, so if a customer decides to prepay, it creates a gap of 2-3%, which then has to be paid.”

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“The retail sector will take some time to fully recover, depending on improvement in domestic consumption, consumer sentiment and availability of retail space at competitive costs,” CB Richard Ellis (South Asia) chairman and managing director Anshuman Magazine said in a statement on Wednesday.

The real estate sector has underperformed the Sensex by 16% in the past one month on concerns of the Reserve Bank of India’s (RBI) hawkish stance towards the sector and likely increases in mortgage rates. Our analysis of Mumbai’s apartment registrations data reveals that demand remains strong despite 5-30% rise in prices in the past five months. Thus, while prices in many pockets in the city are at their lifetime highs, registrations in October were the highest in almost two years. This leads us to believe that residential demand in metros has strong tailwinds and is unlikely to be affected materially by a small increase in mortgage rates. Our top picks are DLF Ltd and Housing Development and Infrastructure Ltd.

RBI increased the risk weightage on commercial real estate lending by 100 basis points (bps), which is likely to result in a 50-100bps increase in borrowing costs. Mortgage rates could also come under pressure, owing to inflation-related concerns. Headwinds of higher prices and mortgage rates are likely to weigh on real estate demand.

Dewan Housing Finance Corporation Ltd (DHFL) has joined the bandwagon of those offering lower interest rate home-loan schemes for the lower and middle income (LMI) group.

The company on 14th December announced a 25-year home-loan scheme at a fixed 8% interest rate annually for a period of two years for loans upto Rs5 lakh, thereafter reverting to the variable interest rate. Similarly, the company has fixed an interest rate of 8.75% annnually for two years for loans above Rs20 lakh.

The customer can avail loans from a minimum value of Rs1 lakh to a maximum amount of Rs5-crore. The scheme offers the lowest EMI of Rs772 per lakh

DHFL will offer customers the dual advantage of lowest interest rate and an elongated period of repayment.

The scheme will be offered to home-buyers across India and NRI customers in the Middle-East and the UK. It will be available across all branches and service locations of DHFL in India and abroad and will be valid for all applicants till 31 January, 2010, with a partial disbursement before March 2010.

** For more Real Estate Projects on Kolkata visit http://www.realhomee.com

visit http://www.realhomee.com for more information on Kolkata Rea Estate Project.