Bank Loan Interest Rates to Dip in 2012
Bangalore: Bank loan interest rates are going to slide this year, as Reserve Bank of India (RBI) has reformed it loan polices, reports Manju AM of MyDigitalFC.Com. Bank loan interest rates will, however, be slashed in certain areas only.
Bank loan rates will witness a drop but the base rate, or bank lending rate, will remain the same. This drop has been attributed to intense competition in the banking sector. The drop in interest rates will be implemented gradually in almost all sections – home loans, education loans, vehicle loans and industrial loans.
Financial Chronicle quotes S.Raman, Chairman and Managing Director of Canara Bank, “While the base rate may remain steady, banks will adopt promotional strategies like lowering of interest rates to grow select product categories. We may also make minor changes in our loan products as a response to competition.”
Central Bank of India led the way in slashing the interest rates, by reducing home loan rates by 25 to 50 basis points and also waiving off processing fee. Ram Sanganpure, Head of Retail Assets at Central Bank of India, said, “The new rates are effective from Monday and the processing fee stands waived until March 31, 2012, when we will take a call on lending rates once again.”