As we look around key factors initiating reversal of the cycle of higher interest rates are mortgages and real estate markets in key commercial and residential areas off Bombay not delhi or Bangalore which have been deflated per 2007 ambitions and coasting at even capacity ( almost thriving)

With TDRs disposed off at earlier rates and new FSI norms, the crash in Mumbai real estate will thence translate to a further depression in prices without the suspect overburdening on affordable housing segments. Similarily the rate hike cycle could be artificially cramped (though at never before highs) by the simple fact of all double digit mortgage rates at the start of 2010 becoming 150 year mortgages at closer to 14% thus forcing banks to redenominate the loans. That could possibly be the limiting factor the banking industry has played in stopping the hike in their borrowing rates from RBI as NPLs are still overshooting the mark at some PSU banks

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