Private sector lender ICICI Bank announced a cut in home loan rate by 0.15 per cent for new borrowers, joining the rate cut initiated by bigger rival SBI.
Home loans up to Rs 75 lakh for women borrowers will now attract an interest of 9.15 per cent from the earlier rate of 9.30 per cent, according to the ICICI Bank website.
At the same time, the new rate for salaried class has been reduced to 9.20 per cent, as against 9.35 per cent earlier.
The new rate is effective from November 2, a day after the bank lowered marginal cost of funds based lending rate (MCLR) by 0.1 per cent.
Yesterday, SBI had slashed interest rates by 0.15 per cent for its home loans up to Rs 75 lakh. SBI home loan is available at 9.15 per cent while women borrowers will get it at 9.10 per cent interest.
According to analysts, the rate reduction effected by large players would put pressure on others to follow suit to remain in the competition.
Since there is hardly any credit demand from corporate sector, most of the banks are chasing retail loans to keep their balance sheet ticking, analysts added.
Yesterday, ICICI Bank launched a product for the salary account holders who have taken a loan from it, offering credit from Rs 5 lakh to Rs 1 crore against property owned by them.
The product, ‘ICICI Bank Home Overdraft’, offers dual advantage of a term loan as well as an overdraft facility, the bank said in a statement.
“While the term loan provides customers with quick funds for immediate needs, the overdraft facility offers them the flexibility to access funds instantly for expenses, as and when required,” the bank had said.
Those buying the overdraft loan from the bank would be able to utilise the funds for their personal needs such as education, medical treatment, home renovation, marriage and overseas travel, among others.
Customers will have the facility to avail a minimum 10 per cent of the total amount as term loan and maximum 90 per cent as overdraft.
ICICI Bank said that the interest on term loan would be charged as per the equated monthly instalment, while on the overdraft the charges will be only on the utilised amount for the period the funds are used.