Tag: icici housing loans

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.

ICICI Bank offers 1% cash back on home loan EMIs in festive scheme

2 Nov 2012, PTI.

MUMBAI: ICICI Bank today launched a limited period offer of one per cent cash back on gross EMI (equated monthly instalment) value as part of a festival scheme.

“Under this cash back offer, one per cent of every EMI will be returned to the customer, apart from providing the option of renewable fixed interest rate for the entire tenure free of cost,” the bank said.

Customers can choose to avail of this cash back offer either in the form of a credit to their account or in the form of a principal pay-down, it added.

The offer will run through the end of December for new customers. The scheme covers renewal/switchover of fixed/floating rate loans without any processing fee, ICICI Bank Executive Director and Retail Business Head Rajiv Sabharwal told reporters in a conference call.

The cash back money could be credited to the borrower’s account or adjusted against the principal outstanding from the third year including the first two years’ dues, and by the end of the fiscal from fourth year onwards, Sabharwal said.

When asked whether the bank has priced in the impact of the new offering on the margins, he said, it will be negligible and that the focus is on customer retention by rewarding loyal customers.

As credit pick-up remains lukewarm, many banks have launched attractive schemes to woo customers in.

Last month, its rival Axis bank launched a scheme wherein a home loan borrower will get 12 EMIs waived if he/she remains with the bank for 15 year or more.

Many state-run banks, including SBI, UCO Bank, Vijaya Bank, and Central Bank, have hit the market with combo loan offers, wherein a home loan customer gets a car loan without the process fee, apart from slashing interest rates by up to 0.50 per cent and the processing fee by half.

According to ICICI bank, the offer can hugely benefit the borrowers. For instance on a 20-year loan of Rs 50 lakh, priced at 10.50 per cent, a customer can gain as much as Rs 1,19,806 in cash back or if it is adjusted against the principal outstanding, the accrued benefit will be Rs 3,63,538 at the end of the loan repayment.

Sabharwal also said the offer includes an option to remain on fixed or floating rate at no cost.

Asked whether this could be considered a dual rate product he said, “to some degree yes, as the pricing varies from year to year, but not in the strict sense of the word as there is no differentiation in the pricing between a fixed customer and a floating rate one.”

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