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ICICI to cut home, auto loan rates

Source: PTI
December 29, 2008 14:40 IST
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Housing, auto and personal loan customers of ICICI Bank will get their new year gift in the form of a cut in interest rates, its CEO and managing director K V Kamath said on Monday.

"We are looking at cutting interest rates very early in January for our housing and other loan customers," Kamath told PTI over telephone from Mumbai.

"The lowering of interest rate would be in new year," he said when asked if the bank was all set to give a new year gift to its customers.

The extent of the rate cut is being calibrated and would be announced soon, he said when asked if the rate could be more than 100 basis points.

ICICI had earlier this month reduced home loan rates for new customers by up to 1.5 percentage point.

There are indications that the fresh cut in interest rates would benefit both existing and new customers.

The prime lending rate of the bank currently stands at 17.25 per cent. The bank last revised the benchmark lending rate by effecting 75 basis points hike in August this year.

SBI has cut its prime lending rate by 75 basis points to 12.25 per cent with effect from January 1.

Home loan major HDFC has also cut its prime lending rate by 50 basis points, while a number of other private and public sector lenders such as HDFC Bank, Punjab National Bank and Bank of Baroda have also announced rate cuts.

Earlier in the day, two leading public sector lenders Punjab National Bank and Bank of Baroda said they would reduce their prime lending rates by 50 and 75 basis points respectively, with effect from January 1.

Besides, PNB also announced a reduction in its peak deposit rate by 100 basis points to 8.5 per cent for deposits of one year to less than three years beginning 2009.

Earlier this month, the bank had reduced its peak deposit rate to 9.50 per cent from 10.5 per cent.

Separately, Bank of Baroda said: "The bank has decided to reduce its prime lending rate by 75 basis points from existing 13.25 per cent to 12.50 per cent with effect from January 1, 2009."

The PLR of PNB would stand reduced to 12 per cent, from the existing 12.50 per cent, effective from January 1.

PNB has also reduced interest rates on various retail lending schemes like floating rate housing loans, car and education loans by 50 bps.

"The interest rates on fixed rate housing loans have been reduced by up to 175 bps with effect from January one," the bank added.

Further, the bank has introduced a housing loan scheme -- PNB Special Housing Loan Scheme-- for new accounts from January 1, 2009 till June 30, 2009.

Under the fixed housing loan of up to Rs 500,000 for maximum period of 20 years, PNB would charge interest rate at 8.5 per cent.

Also fixed rate housing loans of above Rs 500,000 to Rs 20 lakhs (Rs 2 million) for a maximum period up to 20 years would attract interest of up to 9.25 per cent.

"The interest rate will be subjected to reset on July 1, 2014 for the scheme," PNB added.

State-owned lender Union Bank of India has also reduced its deposit rates and Canara Bank has cut its deposit as well as MSME lending rates.

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