IDBI Bank blinked, announcing a reduction of up to 75 basis points (bps), or 0.75 percentage point, in the rates it will charge on new floating home loans beginning April 2.
Desperate lenders have started doing the obvious to get the home loans going — cut rates. IDBI Bank blinked on Friday, announcing a reduction of up to 75 basis points (bps), or 0.75 percentage point, in the rates it will charge on new floating home loans beginning April 2.
The floating rate on loans up to Rs25 lakh has been cut 25 bps to 10.75%, while that on loans between Rs25 lakh and Rs75 lakh has dropped 50 bps to 11-11.25% and on loans above Rs75 lakh by 75 bps to 11.5%, the bank announced.
“Earlier, the bank had reduced the original rates due to the festival season, which was valid up to March 31. Now, we have made the same discounts as official zrates,” said RK Bansal, executive director, IDBI Bank. “The move was essential to maintain the bank’s competitiveness. If your rate is not competitive, nobody will take loans from you.”
IDBI Bank’s home loan portfolio currently stands at Rs26,000-27,000 crore, said Bansal.
Earlier, Central Bank of India announced a reduction in home loan rates, following up on the 25 bps discount it was offering under a festival scheme. The bank has also allowed elongation of repayment schedule without increasing the monthly installments.
But bigger mortgage makers such as Housing Development Finance Corp (HDFC) and State Bank of India (SBI) rule out any reduction in their home loan rates.
“We must look at the rates in the system itself. If some players had rates much higher than their peers, then they will have to come down,” said Keki Mistry, vice-chairman and CEO, HDFC.
SBI managing director A Krishnakumar also ruled out a cut. SBI is offering loans at the same rates as HDFC till March 31, under a festival offer, according to its website.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}