Following its peers, Industrial development bank of India, IDBI , has slashed rates on fresh loans this festive season. The bank has reduced its car loan and home loan rates by 0.25-0.5 percent. The rates would come into effect from 1st October.

As per the new rates, for a home loan amounting to 30 lakh, a rate of 8.75 would be applicable as against the current 9 percent. Home loans within the range of 30-50 lakh would be charged 9 percent as against the existing 9.5 percent. Loans above 50 lakh would be charged an interest rate of 9.25 percent.

IDBI has targeted retail loans worth Rs 18,000 crore by March as against the current outstanding of Rs. 14,000 crore. It is likely to add 3200- crore fresh loans during the period, C S Jain, the bank's head for personal banking group said.

Jain said that the banks deposit base is expected to increase to 67000- crore by the end of this fiscal from the current 50,000 crore. As part of its festive offer, the bank plans to offer 0.25 percent more interest for 6 months-1 year deposits, taken from October-1 to 31.

The bank recently tied up with Chevrolet for vehicle finance. The bank has put a cap of Rs 2500 on the processing fee for the vehicle loans. Fresh loans taken from October 1-December 31 would be charged 8.5 percent rate of interest against the existing 12 percent.

IDBI is also planning to increase the count of its branches from 602 to 1000 by the fiscal's end, said the personal banking group head.

Besides this, IDBI also announced new schemes such as free fire and burglary insurance for current account holders, waiver of AMC charges on Demat account, Jain said.