New Delhi: Amid high speculation, State Bank of India (SBI) has decided to follow suit rate cuts by other banks, and has cut its home loan rates by 50 basis points, which is equal to a 0.5% effective reduction in home loan interest rates, 

It was Bank of Baroda (BoB), which started this process followed by IDBI and then HDFC bank and Union Bank of India also jumped onto the bandwagon. 

Now that the biggest player is openly introducing a competitive home loan rate in the market, other private sector bigwigs like ICICI and Kotak are very soon expected to announce similar cuts.

This 50 bps reduction in home loan rates by SBI, coincides with the festive season. To make the most of this rate reduction, SBI is likely to start an aggressive marketing and pricing campaign. In fact, it has already scheduled a loan mela called ‘SBI Home Loan Mahotsav" in Kolkata from September 28. SBI is expecting to sell home loans worth 150 crores from this festival alone.

SBI is the most preferred home loan provider in India as voted in the AWAAZ consumer Awards. In a survey conducted by TV 18 in association with AC Nielsen-ORG Marg in 21 cities across India, SBI was also voted as the most preferred bank. SBI has long been a trusted source for retail banking solutions in India.

Due to the festive seasons, which starts with October, demands for retail loans increase as people start to buy consumer goods, gifts, cars and property. The high interest rates prevailing during the past few months, had left the retail loan market high and dry. Banks suddenly finding their coffers filled with surplus funds and no loan seekers in sight are now reducing the interest rates to rake in more customers.