Taking cue from the public sector banks, state-run IDBI Bank also cuts its home loan rates by up to100 basis points for the new borrowers with effect from March 3rd.
The bank said that floating interest rates for home loans up to Rs 20 lakh have been revised down by 100 basis points to 10.25% and for those above Rs 20 lakh are reduced by 50 basis points to 9.75%.
Besides, the bank has also reduced the margin money for home loans by 5%. For loans up to Rs 30 lakh, the margin money from has been slashed from 20% to 15% while for loans above Rs 30 lakh, the margin is been lowered to 20% from 25%.
At the same time, IDBI has also reduced its fixed deposit rates by 25 to 50 basis points across various maturities. Fixed deposit with tenure of 1,100 days will now earn an interest rate of 9.25% against 9.5% earlier. The changed deposit rates will be valid from March 6th.
IDBI Bank's head of retail, C S Jain said, "We have brought down deposit rates to reduce the cost of resources. Even after this revision, our rate structure would remain attractive compared to other banks."
On Friday, February 27th, the Reserve Bank of India (RBI) Governor Duvvuri Subbarao met the banks chiefs in order to discuss the interest rate scenario. Following the meeting, some banks like State Bank of India, Punjab National Bank and Union Bank of India scaled down their interest rates.
PNB announced a cut its car loan rates by 50 basis points while Union Bank of India reduced its car loan rates and home loan rates by 125-150 and 25-100 basis points respectively.
Meanwhile SBI has frozen its auto loan rates at 10% for one year.