Soon after the budget was announced by finance minister Yashwant Sinha, I bumped into a senior officer at the State Bank of India, Dr Bhat. He told me that ever since it was known that there was a hike in the set-off of interest on house loans from Rs 30,000 to Rs 75,000 against total income, many of his colleagues (including himself, of course) were thinking of taking loans from the bank for buying a house, even if they didn't need one. The bank charges nominal interest rates for its employees. It might also lease the house, paying a little more than the market rate with a tacit understanding that it will vacate the premises whenever the employee does not wish to renew the agreement. Bhat wanted to know whether I approved of the idea or if there was any legal hitch.
I was surprised at a banker asking this question. It does not need much expertise in finance to realise that if someone takes a loan at, say, 10 per cent, and earns 10.5 per cent on investing it in a very safe instrument, he would be a fool not to jump at the opportunity, even if
