does not just require finance – they may also need ancillary services like loan counselling or legal advice to ensure the title of the property is clear or technical advice to ensure that the structural aspects of the property are in order. it is these add - on services that distinguish the good quality of services from not so good. the typical mortgage borrower of south asian countries, including india belongs to the upper or bis central bankers ’ speeches middle class, is of an average age of 35 – 40 years, usually a first time home buyer and by and large a salaried employee. most loan products are fairly standardised – plain vanilla home loan products, loans for home improvement and extension, land loans, loans for non - residential premises and the newer breed of loans include home equity and topup / personal loans. against the backdrop of lower interest rates seen across the region, most home loans are on floating rate loans. in india, the floating rate of some banks and housing finance institutions is benchmarked to prime lending rate. it has been noticed that several customers opt for floating rate loans without understanding the inherent risks involved. even most of the existing fixed rate loans have been converted into floating rates. to tide over the dilemma of whether to opt for a fixed or floating rate loan, blended options are being offered wherein the customer can hedge part of the interest rate risk by opting for a combination of fixed and floating rates. the major issue, however, is that most individual borrowers find it difficult to manage the interest rate risk under pure or semi floating interest rate regime. hence, there is greater need for fixed interest rate loan products for individual borrowers. coming to currency risk, fortunately, home loan borrowers in the asia - pacific region and india, in particular, are not exposed to exchange rate risks as borrowings are in domestic currency. another area of product innovation could be deposit linked home loan products. this would be very useful for low income groups as they can build equity and establish payment capability track record for availing of home loans. legal constraints a major feature of the indian urbanization process is its non - uniform geographical spread. while smaller cities and towns are fast emerging as centre of demand, the pressure on existing four metros remains enormous. a crucial factor behind this tendency is the barrier for major players in real estate in tapping the vast land potential in rural areas reinforced by poor enforcement of laws against encroachment of public lands as well as lack of clear titles to private lands

walk - in clients for small remittances and payments not exceeding us $ 1, 000. 16. recently, the government of india constituted the unique identification authority of india ( uidai ) to issue a unique identification number ( uid ) with biometric recognition to every resident of the country. it is expected that by latter part of this year, the uidai will begin issuing uids and roll out 600 million uids in a phased manner by 2014. uid enrolment would be done with the help of state government machinery and other registrars. banks could benefit by synchronizing opening of bank accounts for those who will be enrolled through this exercise. government is also looking into the possibility of converting food and fertilizer subsidies into cash payments which will flow through bank accounts. this project is a unique opportunity to leverage uid, bank accounts and mobile telephony services. using uid for fulfilling kyc for small value accounts will facilitate financial inclusion. in a country with deep penetration of mobile phones, this is expected to give a boost to the financial inclusion while ensuring the integrity of financial transactions. branchless banking 17. with 600, 000 villages in the country, we realised that it was impossible to provide access to a bank account for every household through branch banking. at the same time, electronic banking for such a populace where cash forms the dominant payment mechanism, is unlikely to become a reality for quite some time. keeping in view these ground realities, rbi issued the business correspondent guidelines in 2006, which paved the way for branchless banking through agents. the guidelines allowed, for the first time, commercial banks to offer simple savings loan and remittance products through agents, who were allowed to undertake banking transactions, including “ cash in cash out ” transactions at locations close to the customer. banks were advised as part of risk management to adopt ict solutions including biometric identification of the customer. the agents are required to deposit bank ’ s cash balances beyond certain limits with the bank ’ s branches by end of day or the next day. initially, the regulations restricted the entities that could act as business correspondents to “ not for profit ” entities such as ngos / cooperatives / post offices etc. this was because we were concerned about the risk of reckless pushing of products by agents whose sole incentive was earning commission ; it was also felt that local community based organisations and ngos had the trust and confidence of the local population. over the last few years, the list of persons who