NEWS & ADVICE : HOME LOANS
ICICI Bank reduces floating interest rate
By Joseph Samson
Jan 6, 2009
Print    Email    RSS   

Country's largest private sector bank, ICICI Bank has announced a 50 basis points cut for its floating reference rate from 14.25% to 13.75%. The rate cut is applicable to both existing and new home and auto loan customers of the bank.

Following the cut, floating interest rates for home loans up to Rs 20 lakh has come down to 11% while for loans above Rs 20lakh, the interest rate would be 12.5%. The floating interest rate for auto loans would be 14.5%.

The reduction in its Floating Reference Rate (FRR) for home loans is valid from December 31st, 2008. The rate cut was to benefit the existing customers immediately because the bank resets the interest rates for most customers on the 1st day of every quarter. The home loan customers of the bank count to around 1 million.

The reduction in the lending rates is not likely to impact the bank's margin as the deposit rates under various tenures have also been reduced by 50 to 75 basis points.

Meanwhile the benchmark advance rate (I-BAR) of ICICI has also been cut by 50 basis points to 16.75% from 17.25%.

The decision by ICICI comes in the backdrop of several public sector banks cutting home loan and benchmark prime lending rates. It is the first time ICICI has announced a cut in its interest rates ever since RBI has been trying to infuse liquidity into the system.

Even the largest lender, State Bank of India (SBI) said that would revise its lending rate from January. LIC Housing Finance has cut its interest rates by up to 75 basis points for its existing customers, with effect from January 1st. The revised rates for existing customers are in the range between 11.25% and 11.75%. "We are passing on the reduction in our cost of funds to our customers," said Mr R.R. Nair, CEO, LIC Housing Finance.

On the other hand, the new customers continue to get loans up to Rs.20 lakh at interest rates ranging between 9.25% and 9.75%.

Though the interest rates have been reduced by the bank, they are still higher than its rival HDFC Ltd and other public sector banks. Home loan rates of many public sector banks vary between 9.5% and 11%.

 


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

CALCULATE QUICKLY
 Select a product:
 

EDITORS' PICKS
Loan against Property: A shoulder to rest...
How to go about ‘Leveraged Investing’
Your EMIs may help you to reduce your tax...
Prepayment on loans: 'To do or not to do'
Are fixed home loan rates actually...


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