Weekly news for the week ending 7th Nov.

Obama will announce the easing of US controls on exports to India, in a move to boost trade between the two countries .

will address a business summit to showcase US goods as US businesses finalize deals worth around $10 billion with India.

Deals include previously announced transactions involving General Electric for aircraft engines and gas turbines, and Boeing for 737 passenger planes.

But details on a key $4.5 billion sale by Boeing of C-17 military transport planes were still being ironed out.

Obama to ease US-India export controls, boost trade

From now on, anyone applying for a housing loan from a bank will have to pay a margin money of at least 20% of the value of the property.

Earlier, this margin money varied between 10% and 15 %. The RBI also increased the risk weightage of loans above Rs 75

lakh taken for buying property, which could increase the interest rates on loans for high-cost properties.

seen as a pre-emptive measure to rein in the possibility of the creation of an asset bubble and a sign that there could be overheating in the property market.

loan-to-value (LTV) ratio for housing loans should not exceed 80% and increased the risk weight for residential housing loans of Rs 75 lakh and above, irrespective of the LTV, to 125%, from 100% now .

Banks will now lend only 80% of home price

The Reserve Bank of India has asked banks to set aside more capital for their investments in subsidiaries with equity stake of more than 20% instead of 30% in the past.

Banks like Union bank of India, Federal Bank, Oriental Bank of Commerce and some small-to- mid-sized private banks will now have to earmark higher capital.

The new norms requiring banks to set aside investments in associate companies will impact banks which have minority stakes in life insurance companies.

the new guidelines on bank investment in non-financial companies actually provide relief to large banks which have promoted insurance companies.

Simultaneously, there is an attempt to limit banks’ exposure in activities other than financial services.

Set aside more capital for subsidiaries: RBI to banks

Micro finance companies on Thursday agreed to reduce interest rates they charged from borrowers to 24 per cent after a meeting with financial services secretary R Gopalan here.

A cut in rates comes from as high as 34 per cent in the backdrop of an unsavoury situation in Andhra Pradesh, where many borrowers have committed suicides apparently due to coercive methods adopted by micro finance institutions (MFIs) to recover money.

MFIs are in the business of extending loans in rural areas, mainly unbanked areas. About 85 per cent of the loans given by the MFIs come from banks. As of September quarter, the MFIs have lent over Rs 30,000 crore ($6 billion) to over 3 crore customers.

While the banks charge interest rates in the range of 9-14 per cent on loans given to MFIs, some MFIs in turn charge as much as 34 per cent from their clients.

MFIs agrees to reduce interest rates to 24 pc

With target pressure gone, banks report less loan numbers

Loan growth in the banking system is faltering as borrowers shift to market funding and due to tapering-off of window dressing that boosted numbers at the end of the quarter last month.

The rise in bank credit to the commercial sector was also supplemented by the higher flow of funds from other sources.

Rough estimates showed that the total flow of financial resources from banks, non-banks and external sources to the commercial sector during the first half of 2010-11 was higher at Rs 4,85,000 crore, up from Rs 3,29,000 crore during the same period of the previous year.

If the slow pace of loan growth continues, the central bank’s estimates of 20% this year may have to be cut for the second straight year.