In a bid to bolster its presence in the home loan segment, Citibank has launched a housing loan scheme ‘CitiHome One'.

The bank said that it would enable its customer to avail a conventional term loan and a credit line for buying or constructing a home of their choice. The plan allows customers to retain part of the approved home loan amount, which the customer has paid from savings or other sources. The interest on the left over amount will be charged only if the borrower decides to use the credit line.

"We offer customers a dual advantage of interest savings on their home loans by utilising surplus funds and flexibility to structure repayments as per their convenience," Citi India business manager N. Rajashekaran said.

Customers can also decide the amount they wish to take as credit line with the remaining being structured as a term loan.

According to the business manager, the CitiHome One account, where the credit line is set, will serve as an umbrella account where customers can consolidate all their requirements into a single account, beginning with funding the purchase of home to deploying surplus funds for saving interest on the home loan.

The maximum limit for the loan is Rs. 5 crore and the credit line could be to the extent of 30 percent of the total facility or Rs. 1 crore, whichever is lower.

The loan would carry a floating rate of interest in line with the bank's Prime lending Rate (PLR).

Customers also have an option of one-time repayment or converting the credit line into a term loan and pay back through EMIs (Equated Monthly Installments).