ICICI Bank cuts home loan rates

Hindustan Times, 23 Dec 2013.

India’s largest private sector lender, ICICI Bank, has cut its home loan rates for new customers by 15 basis points or 0.15 percentage points, as a part of a special scheme. It will be valid till January 31, 2014.

Under the scheme, the bank will offer home loans up to Rs. 75 lakh at an interest rate of 10.25%, while loans above Rs. 75 lakh will be charged 10.50%, the bank said in a statement on its website.

The move comes shortly after India’s largest lender, State Bank of India, and private sector lender Housing Development Finance Corp (HDFC) reduced their home loan rates a few days ago.

SBI is charging an interest rate of 10.15% for all home loans up to Rs. 75 lakh and 10.30% for loans above Rs. 75 lakh. It also announced a further 5 basis points or 0.5 percentage point discount for women borrowers. The bank was earlier charging an interest rate of 10.30% for loans up to Rs. 30 lakh and 10.50% for loans above Rs. 30 lakh.

HDFC also announced a “winter bonanza” scheme – providing home loans up to Rs. 75 lakh at 10.25%.

The rate cuts come after the RBI’s surprise decision last week to hold its key interest rates in its mid-quarter monetary policy review on December 18.

The repo rate, or the rate at which RBI lends to banks, was left unchanged at 7.75%, as RBI governor Raghuram Rajan indicated that his focus may shift to the slowing growth in the economy.

Rajan also indicated that  the bank would act again if food inflation does not translate into a significant reduction in headline inflation in the next round of data.

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