IDBI, Bank of Rajasthan cut home loan rates

By SiliconIndia   |   Wednesday, September 30, 2009
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Mumbai: In an attempt to cash in on the renewed interest for retail loans, IDBI Bank has reduced interest rates on its home loans by 25 to 50 basis points (bps) with effect from October 1, 2009. The bank will also restart its auto loans and personal loans that it had stopped to check its delinquencies. For loans up to Rs. 30 lakh, the bank will have a floating rate of interest of 8.75 percent and nine percent for loans between Rs. 30 lakh and Rs. 50 lakh. All loans above Rs. 50 lakh, the bank will have an interest rate of 9.25 percent. Home loan book of the bank is Rs. 12,000 crore, which it plans to grow by another Rs. 3,200 crore by the end of the year. Retail term deposits of six months to a year with the bank will also attract a 25 bps higher rate of interest to attract low cost deposits, reports Financial Chronicle. Meanwhile, Bank of Rajasthan has cut its home loan rates with immediate effect. With this, for loans up to Rs. 30 lakh and above, having a maturity of 10-15 years, the bank will charge a floating rate of eight percent for the first year, nine percent for the second and third year. CS Jain, Head, Personal Banking Group at IDBI Bank said that the customers who had earlier postponed purchases are back in the market looking for attractive financing options. "We are trying to cash in on the renewed interest for home and car loans. Personal loans are also back in flavor but we are giving it only to our salary account holder," he said. According to Jain, the bank will also expand from 602 branches to 1,000 branches by the end of the year. IDBI has reintroduced auto loans after having stopped disbursing auto loans for the last two years. Auto loans will carry an invitation rate of interest of 8.5 percent on a floating basis from October 1 to December 31, 2009. Processing fee will be capped at Rs. 2,500 during this period, after which, it will be hiked to 0.5 percent of the loan.
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