EMIs to ease with lowering interest rates
By Joseph Samson
Jun 8, 2009
Print    Email    RSS   

As banks line up to cut the lending rates on the loans, it is expected that market demand for loans will boast. On the consumer side, it would mean easing of the EMI (repayment) and low cost of the advances. The move is also expected to give a boost to the flagging home loan market.

It was for the third time, since December 31, 2008, that the leading private sector lender, ICICI Bank has lowered the lending rates by 50 basis points. With this, the floating reference rate (FRR) and the benchmark advance rate have come down to 12.75 percent and 15.75 percent respectively.

Chanda Kochhar, managing director, ICICI Bank, said, "The new rate on home loans up to Rs 30 lakh for 20 years will be 9.25%. On loans between Rs 30 lakh and Rs 1 crore, it will be between 9.25% and 9.75% and beyond that it will be between 9.75% and 11%, depending on the creditworthiness of the customers."

Many public sector banks have already reduced the lending rates on the home loans, though centre sees more scope for reduction in the interest rates. Major banks, including SBI, and IDBI have been considering further cut in the interest rates. PNB, which has the lowest lending rate of 11 percent, might not lower the lending rates.

AV Bundellu, deputy managing director (retail), IDBI Bank, said: "A lower inflation rate is out today. Interest rates should come down when there is access to low-cost funds. We have revised the rates twice in May. Now the signals will be the monsoon, inflation, and reforms by the new government."

He added, "We need to see how demand picks up. If there are positive sentiments, we may see things improving by August-September. We are waiting for deposits to grow."

According to industry experts, with the declining rate of deposits, the deposit rates might not lower much. It is also reasoned that banks cannot reduce the deposit rates beyond a certain limit, as money will get diverted into other schemes like the postal savings, NSC, PPF which offers 8-9 percent.


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

 Select a product:

e-filing of income tax returns at...
NRI Banking in India
Hybrid loans – are they beneficial?
Know About Different Types of Home Loans...
Save tax with ELSS

PINJORE: CaℒL Giℛℒs In PiNjOrE 09915787550...
PINJORE: CaℒL Giℛℒ In PiNjOrE 09915787550...
how to gate my home loan certificate

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