What you don’t know about housing loans in India – Part 2

I was in India looking for a home and I consulted Canara bank for a loan since my brother had availed a loan from them. They instantly pre-approved me for a 85% loan of upto Rs. 50 lakhs. This means I will pay 15% of the money down and the rest of the money will be covered by a bank loan not exceeding 50 lakhs. Although 50 lakhs was what I requested, I was told that for an NRI, a loan of upto 1 crore was easily possible. I identified a house that I wanted to buy. I decided to take the Canara bank loan, but the builder who was going to sell the property to me would not entertain it. When I dug deeper, I came to know that the builder prefers loans from ICICI bank since they remit the loan amount quicker and will remit the full loan amount directly to the builder even when the property is 70 to 80% complete. He told me that the Nationalized banks will make partial payments proportional to percentage of completion of the building. I suspect if there are deals between banks and builders. The builder probably gets a cut out of the whole deal. I would like to know if others have heard anything in this regard. The builder actually pushed me to take 90% loan instead of 85% and ICICI actually gives out 90% loan. I was in a hurry and did not want to let go of the house, since that was only unit left in the location. So I agreed to go with the ICICI loan. After the fact, a year after getting the loan I feel I should have stuck with a Nationalized bank. My personal opinion is that if you have people back home (example: Parents) who can operate your account, you are better off going with a Nationalized bank. Although things happen at a slower pace at the nationalized banks, you can approach the manager of the branch anytime. They will spend the time talking to you. You can get statements anytime. You would be surprised how difficult it is to get any statement from bank like ICICI after the loan has been issued. You can never get into an ICICI office to speak to any official about your loan. A front office person will ask you to fill a form and tell you that they will contact you or send you the relevant statements. But nothing happens. On the other hand, for my brothers loan, my dad can walk into Canara bank, directly go and talk to the manager and get what he needs. Coming next in part 3: “Getting you hooked”.

What you don’t know about housing loans in India – Part 1

Last year I bought a home in Chennai and I availed a loan from ICICI bank. In my upcoming blogs I will share what a person like me normally goes through and what you might want to know upfront so that you make an informed decision.

First thing you might want to know: The banks are very forthcoming in giving out loans. You will find that you can easily get a loan of even 1 crore rupees pre-approved with very less paperwork. Gone are the days when it was difficult to get loans. With proof of steady income you can easily get a loan of upto 2x or 3x of your annual gross salary without any problems. You will be amazed by the so called “service” that some banks offer you these days. They send sales people to your homes to get all paperwork filled up. They go above and beyond to hook you up with a loan. You might think that it is wonderful customer service, but watch out if you do not know what you are getting yourself into, you might be up for a huge roller coaster ride. The media does not cover the dark side of this due to obvious reasons, they get significant ad revenue from these big banks. More to follow.

Okonomiyaki: Japanese dish for Indian Taste Buds

There was a time when I used to hate Japanese food. Over the years, I have slowly started acquiring a taste for it. Thanks to the numerous business trips to Japan.

This time around I had a very nice dish called Okonomiyaki. One of our local distributors in Japan, took us to this traditional Japanese place. Each table has a gas heated plate in the middle of the table. When you order Okonomiyaki, you are supplied with a mixture of items like egg, some veggies (mainly cabbage), french onions and mixed with some batter. You mix the whole mixture until it becomes viscous enough to hold up almost like a dough. After applying some oil to the heating pan, you pour the mix onto the heating pan to make thick crepe and let it cook for around 5 mins.  Then you turn it over and let the other side cook for a few minutes. What you end up with is something that almost looks like a super thick crepe. Then you apply some condiments to it before you eat it. For Indians, this dish can be called a close cousin to the south indian Uthappam.

If you are in Japan and looking for good vegetarian options suggest going to an Okonomiyaki place. The same Okonomiyaki heating pan can also be used to grill other items like veggies, potatoes and even noodles.

In San Jose Bay Area, there is a place called Izakaya Japanese restaraunt in North First street that apparently serves Okonomiyake, but I have never tried it myself. I will try it pretty soon and update my blog about my experience.

Solar Fabs in India

The other day after writing my previous blog on India’s latest incentive policy semiconductor fabs, I was wondering that for the short term there might not be that much scope for chip fabs. This is because the current world demand is being served by the fabs in US and Asia. With so many chip fabs coming up in China, it will be very tough for India to break the entry barrier. Attracting Solar fabs instead might be a wise idea mainly due to 2 reasons: 1. Competition from China and Taiwan would be lesser; 2. Moreover the solar cells is a capacity limited market right now: Demand exceeds supply.