1. Loans set to get cheaper after HDFC Bank, Canara Bank cut lending rates; Axis lowers deposit rate

Loans set to get cheaper after HDFC Bank, Canara Bank cut lending rates; Axis lowers deposit rate

Starting a fresh round of rate cuts after repeated calls from RBI, private lender HDFC Bank and state-run Canara Bank today lowered their lending rates...

By: | Mumbai | Updated: August 31, 2015 10:42 PM
HDFC bank interest rate

The move by HDFC Bank may trigger a fresh round of rate cuts by other banks as well. (Reuters)

Starting a fresh round of rate cuts after repeated calls from RBI, private lender HDFC Bank and state-run Canara Bank today lowered their lending rates by up to 0.35 per cent, a move that will make home and other loans cheaper for consumers.

Other banks may also follow suit due to competitive pressure.

HDFC Bank today lowered base rate by 0.35 per cent to 9.35 per cent — the lowest in the industry, while Canara Bank cut its minimum lending rate by 0.10 per cent to 9.90 percent.

At the same time, country’s third largest private lender Axis Bank cut its deposit rates by up to 0.50 per cent across maturities. A cut in deposit rate is generally considered a precursor for reduction in lending rates.

In its monetary policy review on August 4, RBI Governor Raghuram Rajan had rued that banks had lowered their rates by only 30 basis points despite the central bank having cut its benchmark rate by as much as 75 basis points since January. 100 basis points are equivalent to one percentage point.

Rajan had also linked better monetary policy transmission or banks cutting their lending rates to any future rate reduction by the central bank.

“HDFC Bank has decided to lower its base rate, or the minimum rate of lending, to the lowest level in the industry, to 9.35 per cent from the existing 9.70 per cent. The new rates will be effective tomorrow,” a source told PTI.

The base rate of country’s three largest lenders — SBI, ICICI Bank and HDFC Bank — stands at 9.7 per cent.

Canara Bank in a filing to BSE said, “The board has approved reduction in the base rate by 10 basis points from 10 per cent to 9.90 per cent for loans or advances effective from September 3, 2015”.

Besides, Axis Bank cut its deposit rates by up to 0.50 per cent across maturities.

“We have cut our deposit rates by 0.20-0.50 per cent across tenors. The revision will be effective tomorrow,” a senior official from the bank told PTI.

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Tags: HDFC Bank
  1. M
    Mahesh
    Sep 1, 2015 at 3:49 am
    Please be clear its HDFC Bank and not HDFC Ltd. Both these are different enites HDFC Bank provides does not provide loan for Housing even though it process the home loan doents. The present HDFC Ltd Home loan intrest rates is still 9.90% and not 9.7% which is more than its peers.
    Reply
    1. D
      Divyang Pathak
      Sep 4, 2015 at 3:21 pm
      When asked whether my current home loan rate can be revised to 9.35%, I was answered by HDFC Home loan official that it is applicable for HDFC Bank not HDFC Home. He further said, it is applicable to only car loans, personal loans etc., Home loan would keep constant at 9.85% for female and 9.90% for Male. I want to know how true it is.
      Reply

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