ICICI Bank Cuts Home Loan Rates

July 7, 2007	(1 votes, average: 4 out of 5)  Loading ...
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In an effort to control its falling home loan disbursements, ICICI Bank recently snipped its interest rates on home loans by 50 basis points. The reductions will be applied to all loans below Rs 20 lakh.

The institution has decided to cut on rates following a decision by the Reserve Bank of India (RBI) to allow render more weightage to home loans up to Rs 20 lakh. Clearly, an increase in home loans can help the bank meet its sector obligations, says a bank official.

Complying with other norms released by the central bank, ICICI was passing on the benefits of the regulatory relaxation to loan borrowers. There has been an apparent increase in the lendable resources of the bank. Also, it has raised close to Rs 17,500 crore through an equity issue.

Before bringing any reduction in loan picture, the bank offered floating rate loans at 12% and fixed rate loans at 14%. Now, loans to floating rate borrowers will be available at 11.5%. However, home loans with ICICI bank are still expensive than what have been offered by HDFC.

Unlike earlier scenario, any home loan up to Rs 50 lakh applied between June 18 and July 15 will carry a variable interest rate of 11% per annum instead of 11 .25%. Add to this, the applicable fees during the promotion will be 0.25% rather than 0.50% of the loan applied for. The applicants are required to avail the disbursement before July 31.

Industry watchers expect interest rates to be stable in near future.

News Published Under:   Home Loans |

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