The hike in the policy rates by the Reserve Bank of India during the last year lead to a reasonable increase in the home loan rates. Though, there was no dearth of the home loan borrowers during that period also.

The Chairman and Managing Director of Indian Overseas Bank, Mr. M. Narendra said, "Most banks have not applied the normal spread mechanism on the retail loans. We are keeping the retail rates attractive so that customers are not unduly burdened."

The Executive Director of Vijaya Bank, Ms. Subhalakshmi Panse said, "The rates are in tandem with salary hikes in Bangalore and Pune, because of the predominant IT crowd in these cities."

She also said, "However, the off-take in tier-II and tier-III cities are good, as the property rates in these locations are still within the reach of the middle-class segment, and the rates are not higher as in the metros."