Fun time

New Delhi, Sept. 22: The festive spirit has caught up with Punjab National Bank, which today announced a reduction of 25 basis points in floating home loan rates and car loans. The reduced rates will apply from tomorrow.

The PSU bank expects these sweeteners to help meet its growth target of 18-20 per cent for its loans this fiscal. In the first quarter of this fiscal, between April and June, loans disbursed by the bank were up by 37.4 per cent.

Documentation charges too have been waived, while the processing fees on home loans and car loans slashed by 50 per cent. “A reduction of 25 basis points is offered under the bank’s housing loan scheme (floating option) for all tenor of repayments up to 20 years,” sources said.

The rates for home loans will be 8.5 per cent for up to five years; 8.75 per cent from five years to 10 years; and 9 per cent from 10 years to 20 years.

The rates on car loans are now lower by 25 basis points at 8.5 per cent over the period of five to seven years.

Apart from these concessions, PNB is offering interest rate rebates of 0.5 per cent in its retail lending schemes.

These relate to loans against gold jewellery, mortgage, future lease rental, personal loan (all variants), super trade and traders loan (up to an upper limit of Rs 20 lakh).

Bank lockers too would be made available at a rebate of 50 per cent on rent for the first year only. The rebates under the Festival Season Bonanza scheme were for a limited period, bank sources said.

The RBI had recently jacked up interest rates by 25 basis points to check inflation, prompting PNB to raise its home loan rates by 5 basis points and prime lending rate by 25 basis points on August 1.

HDFC upbeat

The Housing Development Finance Corporation Limited (HDFC) today said it does not anticipate a further hardening of interest rates in the next two to three months.

“Hardening of interest rates depends on many factors like global interest rates, inflation and oil prices. Given the current trend, I don’t see interest rates going up in the next two to three months,” HDFC managing director Keki M Mistry told reporters on the sidelines of a Ficci-organised real estate summit.

Replying to a question, Mistry said though the demand for housing finance from investors has slackened in certain pockets of the country, the demand from individuals is high.

Mistry said the apprehensions about rising rates ignore the high rates that prevailed even a decade back when interest rates on home loans were about 17-18 per cent and the cost of borrowing was also higher. “Now, the income of individuals has gone up and interest rates are hovering at around 9.5 to 10 per cent,” he said.