Citibank Deducts Home Loan Rates

April 1, 2009	(Be the first to rate this story!)  Loading ...
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A foreign bank has finally reduced its interest rate. Citibank today said that it will lower its home loan rates by 50 basis points. The bank, which had announced a similar cut in January, will see its mortgage prime rate fall to 13.75 per cent from April 1. In a statement, the bank said that the benefit will be available to all its existing customers on floating rate loans. A bank spokesperson said that, depending on loan tenure and amount as well as the customer’s relationship with the bank, he could get a loan at up to 50 basis points lower than the benchmark rate.

HSBC, which has considerably scaled down lending activity, refused to comment on its future course of action saying it did not make forward looking statements. Despite repeated monetary policy measures initiated by the Reserve Bank of India to step up credit flow, foreign banks and private players, such as ICICI Bank, have not lowered lending rates. As a result, their growth in the Indian market has slowed down considerably. Lenders such as ICICI Bank, which have not pared rates, have opted to lower home loan rates.

Public sector banks have, however, responded with repeated rate cuts, which together add up to 200 basis points. Even today, two government-owned players –Vijaya Bank and CanFin Homes (CFHL) – have announced rate cuts. Canara Bank said its benchmark prime lending rate will be lowered by 50 basis points to 12 per cent from tomorrow. Interest rates on personal loans as well as existing home loans, which are linked to the BPLR, will also come down by 50 basis points, the bank said in a release.

Canara Bank-promoted CanFin Homes has announced a 50-basis-point reduction in its variable interest rate loans for existing and fresh individual housing loans with effect from April 1, 2009. This is the second rate reduction by the company in the last three months. The new rates for all fresh variable rate loans are 9.25 per cent for loans up to Rs 30 lakh and 10.25 per cent for loans above Rs 30 lakh. The revised rate of interest on fixed rate loans is 12.25 per cent. The reduced rates are applicable for all repayment periods. CFHL also has reduced the front-end fee to 0.50 per cent from the existing 0.75 per cent, the bank said in a statement.

News Published Under:   Home Loans |

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