“Also, considering the current economic scenario, giving boost to retail loans, such as consumer loans or personal loans, will give indirect boost to manufacturing sector which is good for the economy”, he adds.

Earlier, State Bank had reduced rates in August and now offers the cheapest home loan after a reduction in its base rate by 0.25 per cent to 9.75 per cent. SBI now offers loans up to 30 lakh at 10 per cent and loans above 30 lakh at 10.15 per cent.

“We are seeing demand for home loans doubling ever since we have reduced rates on home loans. Also, we are seeing customers from other finance companies and banks migrating to SBI due to our attractive rates,” said A Krishna Kumar, Deputy Managing Director of SBI.

As per experts, many other banks are likely to come out with their festival offers on the back of ample availability of liquidity coupled with subdued growth in corporate lending.

So far, banks including Punjab National Bank, Syndicate Bank, Vijaya Bank have floated their special schemes to cash in on the festival demand.

In the second quarter, credit growth was almost flat at 0.1 per cent at 16.4 percent against the Reserve Bank's guidance of 17-18 per cent for this fiscal.

(With Agency Inputs)

Also Check: Car Loan Gets Cheaper With Home Loan