People planning to finance their new house through ICICI Bank may give it a second thought because the bank has raised its new home loan rates.

ICICI Bank's home-loan subsidiary, ICICI Home Finance Co (I-HFC) has marked a hike of 100 basis points in its new home loans. Home loan at a floating rate has been raised to 13% from 12% while the interest rate for fixed home loan is at 16.5%.

However these rate hikes would not be applicable to existing customers of the bank. I-HFC has quietly raised the home loan rates without making any official declaration. The rates were revised on October 10th and were discovered by a customer who wanted to avail a loan from I-HFC.

A direct sales associate (DSA) of ICICI Bank said, "We were not sent any mail as the bank has not increased the benchmark prime lending rate but has increased the margin. We were informed over the phone, 10 days ago."

"As we are seeing an increase in our cost of funds, the same is being reflected in our lending rates," said a spokesperson from ICICI Bank.

This is unusual at a time when the RBI has reduced the repo rate- short term lending of RBI to commercial banks- by 100 basis points to 8%. Repo rate is said to help banks to reduce their cost of funds.

RBI is also reduced CRR- the percentage of money commercial bank needs to keep with it- by 250 basis points to 6.5%. This rate raises liquidity in the system which helps banks to increase their funds.

This move to increase home loan rates by ICICI Bank looks opposite to the steps taken by banks like Punjab National Bank and Union Bank of India. Both these PSUs have declared a cut of 50 basis points in their home loan rates.

These rates of ICICI are highest in the whole industry.