Mumbai, Oct. 10: The State Bank of India (SBI) today lowered interest rates on home, automobile and personal loans by 50 to 100 basis points as an offer for the festive season.
The home loans are now cheaper by 0.50 to 1.00 per cent, depending on loan maturities and the amount.
The bank said it would give a discount if the borrower had a salary account with the bank but didn’t quantify it. It also said it would give a higher discount if the borrower put up some margin money.
The rates on new car and two-wheeler loans have been reduced by 1 per cent depending on the amount and maturity period. Loans for new car loans are now available at 11 to 12 per cent.
Similarly, personal loans were made cheaper by 0.5 to 1 per cent. The bank is also offering a 50 per cent concession in processing charges on all the personal segment loans.
The new rates are applicable for all loans sanctioned on or after October 8. The festive offer will be valid till December 31.
However, existing borrowers of the country’s largest bank will pay interest at the current rates.
The SBI also brought down interest rates on deposits of select maturities by 25 basis points. The country’s largest bank announced that it had reduced rates on loans to transport operators and farm mechanisation loans which, it said, are already lower than most private and public sector banks.
The State Bank offer comes in the wake of similar offers from peers such as the Bank of Baroda, Allahabad Bank and the Housing Development Finance Corporation, which recently cut their home loan rates by half a percentage point.
Bankers say the move by the SBI is another indication that interest rates are peaking out.
While there is abundant liquidity in the banking system, credit offtake has slowed in the past few months, particularly at the retail end because of high interest rates.
The SBI will launch a reverse mortgage loan for senior citizens. People above 60 can get this loan — in monthly or quarterly instalments or as a lump sum payment — against the security of their self-acquired, self-occupied houses. The loan will be offered jointly if the spouse is alive and is above 58 years of age.