Banks may think of lowering home loan and auto loan rates
By Joseph Samson
Jun 20, 2014
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It has been reported that the possibility of lowering of home loan rates and car loan rates has increased, with the rates on overnight borrowing falling below the rate at which the Reserve Bank of India lends to banks, indicating comfortable liquidity.

The overnight short term rates reduced by 70-90 basis points in just three days after the Reserve Bank of India on Wednesday infused Rs 10,000 crore through two-day term repo - a platform to lend short-term money to banks . Lenders may think of cutting rates but without slashing the base rates, only when overnight rates sustain below or around 8% for the next few weeks

The general manager of the Laxmi Vilas bank stated that bank may watch for the budget proposals on fiscal consolidations and can decide for lowering of the rates, even if there is no reduction in base rate by the RBI.

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