Mumbai, Oct. 22:
ICICI Bank, India’s largest private sector bank, is offering flat processing fees on home loan to its Non-Resident Indian (NRIs) customers for the festive season.
The bank will charge a processing fee of Rs 5,000 on home loans up to Rs 75 lakh and Rs 10,000 on home loans above Rs 75 lakh, this up to October 31, 2013.
On loans below Rs 10 lakh, ICICI bank will charge a processing fee of 0.5 per cent on the loan amount. The bank also has a referral arrangement with ICICI Home Finance Co Ltd which provides property search facility in India.
Further, the private lender has also partnered with Thyrocare Technologies to give discounts on health check-ups offering 77 medical tests worth Rs 5,000 for Rs 1,500 for its NRI customers and their family members, the bank said.
Moreover, the bank’s NRI customers will get preferential rates on foreign currency conversion and a ‘no minimum balance savings accounts’ to resident family members of NRI customers
Rajiv Sabharwal, Executive Director, ICICI Bank, said, “These offers have been designed based on customer insights derived from serving 1.5 million NRI customers across more than 150 countries and processing over 2 lakh NRI transactions monthly.”
Bangalore, Oct 22: Business Line
Syndicate Bank has slashed the interest rate on vehicle loans, consumer durable loans and light and heavy commercial vehicle loans.
To commemorate its Foundation Day, the bank is offering home loans at 10.25 per cent (base rate) for both the existing and new borrowers irrespective of the loan amount.
Interest rate on two-wheeler loans for home loan borrowers has been reduced from 12.25 per cent to 11.5 per cent (base rate + 1.25 per cent). For others, it is 12 per cent (base rate + 1.75 per cent).
Interest rate on four-wheeler loans for home loan borrowers has been brought down from 10.9 per cent to 10.4 per cent (base rate + 0.15 per cent). Other borrowers will be charged at 10.75 per cent (base rate + 0.50 per cent).
Interest rate on loans to consumer durables has been brought down from 15 per cent to 11.75 per cent (base rate + 1.5 per cent) for home loan borrowers. For others, it is 12.75 per cent (base rate + 2.50 per cent).
Interest rate on loans to light and heavy commercial vehicles has also been brought down from 12.75 per cent to 11.5 per cent.
3 Sep 2013, ET Bureau
MUMBAI: LIC Housing Finance has raised interest rates on home loans by 35 basis points but has spared its existing customers from a rate hike. The company has not hiked its prime lending rates – the rate which is linked to floating rate that is charged to customers- to protect the existing customers. It raised rates on two of its schemes – Bhagyalashmi Plus and Super Choice – and has also launched a new scheme wherein it would charge a fixed interest rate of 11.50% for 10 years.
Under ‘Bhagyalakshmi Plus’ scheme aimed at women borrowers, LIC Housing would charge 10.35% against 10% charged in the past.
If the first borrower is not a woman, the person can opt for ‘Super Choice’ scheme wherein LIC would charge 10.60% against 10.25% charged earlier. In both these schemes – Bhagyalakshmi Plus and Super Choice’ scheme – rates are fixed for first two years and floating rate thereafter.
“We do not have any plan to raise interest rates in immediate future because it will only add to the burden of our existing customers,” said V K Sharma, MD and CEO of LIC Housing speaking to ET. “But the current rates are not sustainable as it is hurting our margins.” He said that the move by LIC HF is also aimed take care of shareholders interest since raising rates for new customers would ensure healthy margins.
In the recent weeks, after Reserve Bank of India tightened the liquidity in the system, private banks and housing Finance companies like HDFC has raised interest rates on the home rates. For instance HDFC floating rate home loan is pegged at 10.40% for loans below Rs 30 lakhs and 10.65% for loans between Rs 30 to 75 lakhs.
At present, it charges 10.60% for loans above below Rs 75 lakhs and 11.10% for loans between Rs 75 lakhs and Rs 3 crore.
Meanwhile, the housing finance company is mainly owned by LIC, launched a ‘New Fixed 10’ scheme wherein the customer wherein interest rates would be fixed for ten years at 11.50%. Further, the customers would have an option to shift to the floating rate loan after five years.
However those wishing to take fixed rate loan for the entire tenure of the loan, the company charges 12.50% under the scheme ‘sure fixed scheme’.
24 Mar 2013, PTI.
Borrowers troubled by elevated interest rates will have to wait for a bit longer for relief as bankers have virtually ruled out any immediate cut in the lending rates, citing high cost of funds.
The stance comes even after the Reserve Bank delivered two successive rate cuts of a cumulative 0.50 per cent this year.
“The basic thing that is required – the cost of deposits – is still in the higher side,” Union Bank of India Chairman and Managing Director D Sarkar said, explaining his bank’s inability to cut rates now.
Pratip Choudhary, the chairman of SBI, also said it is impossible for his bank to cut rates in the near term.
Many state-run banks, which generally rely on the costly bulk deposits to shore up their deposit bases unlike their private sector counterpart, which mop up the low-cost savings and current account deposits, have been ratcheting up their term deposit rates for the past few months.
The poor deposit collection problems for the state-run banks were compounded with finance ministry’s directive last year asking them to bring down their bulk deposit ratio to 15 per cent of their total deposits by March 31.
In a move that some experts saw as a sign of a weakness in deposit mobilisation, SBI upped its deposit rate offering by 0.25 per cent last month.
Deposits have grown only about 13 per cent during the fiscal, while credit has grown much faster at close to 17 per cent. In the absence of sufficient deposits, the credit deposit ratios for the banks go up, according to the latest RBI data.
The interest rate scenario has been at an elevated level for over two years now, after the RBI went on a 13 consecutive rate hikes between March 2010 and October 2011 with a view to fight double-digit inflation.
13 Mar 2013, ET Bureau.
KOLKATA: State-run Allahabad Bank has lowered interest rate by 5 basis points to 10.25% for housing loans above Rs 30 lakh to attract new customers before the end of this fiscal.
State Bank of India, India’s largest bank, offers home loans above Rs 30 lake at 10.10% rate, while ICICI Bank’s rate for this high-value bracket is 10.5-75% a year. Kolkata-based Uco Bank offers home loan at 10.2% a year.
A senior official in Allahabad Bank said the bank has good demand for loans above Rs 30 lakh of late, while borrowers planning to take a loan less than Rs 25 lakh are deferring their decision to get the benefit of tax breaks announced in the budget.
The bank offers a 50% rebate in home loan processing fee. The government has proposed that a person taking first home loan up to Rs 25 lakh would get an additional Rs 1 lakh deduction of interest over and above the present deduction of Rs 1.5 lakh. To get the benefit, loan needs to be availed in 2013-14 and the value of the property has to be below Rs 40 lakh.
3 Oct 2012, PTI.
MUMBAI: Private sector lender Federal Bank today said home loans will be offered at its base rate, which is pegged at 10.45 percent, from October 3 to October 18 as part of the 67th anniversary of its founder’s day celebrations.
The Kochi-based bank will also offer discounts in some other segments during this period.
The bank, which has 1,010 branches spread across the country, had total business of Rs 86,693 crore by end of the last fiscal.
2 Aug 2012, ET Bureau.
KOLKATA: National Housing Bank has slashed its refinance rate by up to 100 basis points for home loans not exceeding Rs 5 lakh. A 100 bps is 1 percentage point.
NHB said it has reduced the rate to promote affordable housing finance for low income people in urban areas. It started a special refinance scheme for them since July this year.
It is expected that a lower refinance rate would prompt primary lenders like banks and specialised housing finance companies to reduce their lending rates for economically weaker section.
Low income people is one who earns less than Rs 15,000 a month. Workers in the informal sector are eligible for the facility.
The apex housing bank provides refinance support to primary lenders against their actual lending.
It has reduced the refinance rate to 9% for loans up to Rs 2 lakh and 9.25% for loans between Rs 2 and 5 lakh. The refinance rate was flat 10% for loans up to Rs 5 lakh prior to this. NHB will offer the refinance at fixed rates for 5 to 15 years.
6 Jul 2012, ET Bureau.
KOLKATA: The government has cut the size of interest rate subvention corpus for affordable housing loans by a fifth as it focuses on austerity over growth to contain the burgeoning fiscal deficit.
It has fixed the corpus at Rs 400 crore for the current fiscal, 20% less than last fiscal’s Rs 500 crore.
The government runs a 1% interest subvention scheme for housing loans up to Rs15 lakh to generate additional demand for credit and provide fillip to a sagging real estate sector, but the decision to shrink the corpus has raised questions on whether the government is expecting a lower growth in housing finance.
“There is a debate between austerity and growth and we have made up our mind to contain fiscal deficit,” C Rangarajan, the chief economic advisor to Prime Minister Manmohan Singh had said last week in Kolkata.
The government is also contemplating cutting subsidies on diesel and LPG to reduce the fiscal deficit to 5.1% of the GDP this fiscal from 5.7% in 2011-12.
Earlier this week, the Union cabinet had given its consent for extending for one more year, till the end of 2012-13 fiscal, the 1% interest subvention scheme on housing loans up to Rs15 lakh where the cost of the house does not exceed Rs 25 lakh.
18 May 2012, PTI.
MUMBAI: State-run Union Bank of India today slashed interest rates on home loans to its base rate in select case.
The new rates, which will be applicable to both existing borrowers on floating rates as well as new ones, will be able to avail of credit at the bank’s base rate of 10.50 percent, the city-based lender said in a statement here.
Loans above Rs 30 lakh but under Rs 75 lakh will be charged an interest rate of 0.25 per cent above the base rate, while those between Rs 75 lakh and Rs 5 crore will have to pay a margin of 0.50 per cent over the base rate, it said.
The bank had last month cut its base rate or the minimum rate of lending by 0.15 per cent to 10.50 per cent, following RBI’s surprise move to cut its key lending rate by 0.50 per cent at its annual credit policy on April 17
20 Dec 2011, Mayur Shetty, TNN.
MUMBAI: Floating rate home loans, which did not reflect market rates when they fell, would now become more faithful to their name. With all major lenders discontinuing prepayment charges on floating rate loans, including those refinance , banks say that floating rates will now indeed float.
ICICI Bank waived pre-payment charges on floating rate home loans effective from November 23 this year for both new and existing customers. This is applicable for partial or full prepayment of home loan. The private bank was the last of big lenders in home finance to continue to impose a penalty on borrowers who chose to close their loan account even if it was from their own resources. Now any floating rate loan can be repaid without penalty.
According to a report by rating agency ICRA, there is already a high level of pre-payment in home loans. The rating agency has completed an analysis of home loan portfolios that have been securitized and subsequently rated by ICRA. The median monthly pre-payment rate has been around 1.1%. Banking sources say that in a falling interest rate regime, the absence of pre-payment charges will put pressure on banks to keep revising their rates in line with those prevailing in the market . If there is a surge in pre-payments , it will affect banks that have securitized and sold their home loan portfolios.
Other dominant lenders such as State Bank of India, HDFC and LIC Housing Finance had discontinued pre-payment charges earlier this year. While SBI had done away with all prepayment charges, including those for refinanced loans voluntarily , HDFC and LICHF discontinued with pre-payment penalties following a National Housing Bank directive in October . Other public sector banks and Axis Bank in the private sector did not have a pre-payment penalty on floating rate loans. Other banks have done away with charges following moral suasion from RBI.