Allahabad Bank cuts home loan rate by 0.25%

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Mumbai, March 18:: A day after UCO Bank announcing cut in home loan rate, another public sector lender Allahabad Bank has slashed housing loan rate by 0.25 per cent for both floating and fixed amounts up to Rs 20 lakh.

"The reduction in interest rate has been given to customers as the bank has been able to reduce the cost of incremental deposits, the general market scenario and to boost the demand in housing loan sector, particularly among small and medium category borrowers," Allahabad Bank said in a statement to the Bombay Stock Exchange.

The above reduction will be effective from April one, on all fresh sanctions, it said.

Accordingly, the minimum interest on housing loan for five-year period will be 9.5 per cent per annum and maximum would be 10.50 per cent a year for a period of 15 to 25 years in PLR-linked loans, it said.

Earlier this month, Finance Minister P Chidambaram had impressed upon the banks to moderate home loan rates. "I shall certainly bear in mind that there is public demand that interest rates for borrowers, who borrow (housing loans) up to Rs 20 lakh, must be lowered."

"I made a number of efforts to impress upon bankers in this regard ... it is a constant effort that I will have to make... bankers will have to take a call, RBI will have to take a call," Chidambaram had said.

The bank is also approaching its Board for further reduction in Prime Lending Rate to make all PLR-linked loans more comfortable for its borrowers.