BORROWER’S DELIGHT

Mumbai, March 30: State-owned IDBI Bank today brought down interest rates on new floating rate home loans by 25-75 basis points.

The lender will now offer an interest rate ranging between 10.75 per cent and 11.50 per cent on various home loans.

The revised rates will come into effect from April 2.

Bankers see the reduction as an attempt by the bank to gain market share at a time high interest rates have deterred many from taking these loans.

IDBI Bank is not the only one to have brought down home loan rates in recent times.

Last month, the Central Bank of India and Bank of Maharashtra — both nationalised banks — reduced home loan rates by up to 25 basis points. The lenders also did away with processing fees. While the Bank of Maharashtra is now giving a five-year home loan up to Rs 25 lakh at the rate of 10.60 per cent, the Central Bank of India is offering loans up to Rs 30 lakh at 10.75 per cent.

Both the banks also waived processing fees with the Central Bank not taking processing fees across the board.

IDBI Bank today said interest rates on new floating rate home loans across loan slabs would be reduced up to a maximum of 75 basis points.

While the floating interest rates for loans up to Rs 25 lakh have been reduced by 25 basis points to 10.75 per cent, the extent of reduction is progressively higher for larger loan amounts.

It will be cut by half a percentage point on loans ranging from Rs 25 lakh to less than Rs 75 lakh and by 75 basis points on loans of Rs 75 lakh and above.

The new interest rate on home loans above Rs 25 lakh and up to Rs 30 lakh has been revised to 11 per cent and 11.25 per cent for loans above Rs 30 lakh but up to Rs 75 lakh.

The bank had revised its home loan interest rates last August, following an increase in its base rate.

Subsequently, the bank made certain changes in its card rates for a limited period coinciding with the festive season.

While all the rate cuts are applicable for new clients, bankers say existing customers can get a relief only if the Reserve Bank of India brings down the repo rate. The repo rate is that at which the central bank provides liquidity to banks.