RBI governor, Dr Y V Reddy has ssaid that he is uncomfortable at the rate at which property prices are rising in India. Earlier, he had told lending to real estate would get expensive and had slammed the government's SEZ policy.Today, the RBI said that it is monitoring exposure to Real Estate, bank by bank, branch by branch. "We don’t take a view as to whether there’s a bubble, but there is slight discomfort that asset prices have been moving too fast".
He has further added,
"On the whole, my assessment is that our warnings would have had some impact and given the exposure of the banks, I would not expect damage to our banking system in a systemic sense, assuming there is a localised bubble that bursts"
Hopefully we will see the trend reverse soon as we want lower real estate prices to provide global services and manufacturing activity which is the main job creator and driver of our economy.
Tags: RBI India, Realty India, Real Estate India, Indian Economy
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