NEWS & ADVICE : HOME LOANS
Banks' new idea to let customers into base rate
By Joseph Samson
Aug 2, 2010
Print    Email    RSS   

Banks have discovered a new way of leading customers to the base rate regime. With RBI refusing to finally do off with benchmark prime lending rates (BPLR), banks have to take their own initiatives to make customers move towards base rate system of lending. They have done so by raising the BPLR.

Two major public sector lenders, Punjab National Bank and Union Bank of India have revised their BPLR rates. While for PNB the raised rates are 11.75% as compared to 11% earlier, Union Bank of India has increased the rates to 12.25% as compared to 11.75%. PNB's revised rates are to come into effect from 1st August and Union Bank's rates from 4th August.

Rising cost of deposits and attempt to prevent affect on margins has been one of the major reasons behind banks taking this move.

"In the current scenario of rising interest rates, our deposit costs are increasing. Hence, we have no choice but to realign the BPLR to protect our margins," said a senior Union Bank of India official.

However, another public sector bank official said that customers should not opt for base rate just based on the fact that it is cheaper than BPLR. They should look into all other factors too.


 


(Comments Posted : 0) Post Your Comments
Show All Comments
COMPARE QUICKLY
 Select a product:
 

CALCULATE QUICKLY
 Select a product:
 

EDITORS' PICKS
Evaluate Hidden costs before buying a house
Fixed or floating interest rate home loan:...
IBA to push for MIBOR as the benchmark rate
The Home Loan Rate Pendulum
Complete Guide to the Home Loan Process in...


PINJORE: CaℒL Giℛℒs In PiNjOrE 09915787550...
PINJORE: CaℒL Giℛℒ In PiNjOrE 09915787550...
how to gate my home loan certificate

NEWS THIS WEEK
Canara Bank earned a profit of 60%. Feb 6, 2015
New Branch of Laxmi Vilas bank at Vijayawada Jan 30, 2015
Home loan EMIs expected to drop down Jan 21, 2015
Corporation Bank received MSME banking excellence award 2014 Jan 19, 2015
Home loan rates set to fall, after reduction in repo rate Jan 16, 2015
News Archive