Long term loans

Background:
ICICI, leading bank in India launches new product in Home loan segment "ICICI Extraa loan" which would enable repayer to drag loan till his/her age is 67

Thought:
This is exactly what happens when customers are required to pay more for same home than its actually worth.
Current real estate scenario in India is controlled by big houses, developers and brokers. Rent and sell prices are governed by supply and not demand. If customer is not willing to pay for the home, he has to look at other places for affordable housing. This affordability is bourn by customers and not sellers or landlords which is kind of inequality.

Only other option customer has is to increase the capital which is provided mostly by banks. Banks have their own calculations to ascertain whether the loan would be paid back or not. Low demand in market for loan would push banks for such measures to increase in span of loan to match the eligibility against inflated home prices.

Question isn't on whether banks should do it or not, but is to whether it would give chance of increasing NPAs and/or further increase in home rates!!
Fingers crossed, we hope that it'd do neither of them.

Update: On next day of publishing this post. Here RR argues that Developers should reduce property prices.

Genuine buyers were unable to buy home due to high property prices, says RBI

Repo rates amid crisis!!

Background: On 24th Aug 2015, Sensex collapsed 1700 points responding to China's Sharemarket and global cues.
There was a strong push to cut RR rates by Raghuram Rajan, The Governor of the Reserve Bank of India (RBI)

Thought:
How would RR(RBI) cut rates(RR) ? He needs to tame leading banks NPAs as well.
As of now, on verge of payment banks, largest threat that Nationalized bank feel is loss of business further exposing NPAs in greater detail.
This would mean that in recovering that money, banks would not pass the rate cut to end user and we still have same issue.
The best shot is to have Banks stabilized and then go for rate cut which gets transferred to Customers enabling them to pump money in market...