Banks, housing finance cos get ready to reduce rates

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Mumbai: Banks and housing finance companies are getting ready to reduce their lending and deposit rates further. YES Bank said with effective December 8, it has reduced its prime lending rates by 50 basis points.

Chanda Kochhar, CFO and joint MD of ICICI Bank which has announced reduction of rates by 150 basis points for the new customers for the housing finance below Rs 20 lakh said the interest rates are also expected to soften with these current measures. “Another important announcement is the concept of restructuring of loans for the corporate sector. These measures are critical for bankers to support and stand alongside our borrowers in these turbulent times,’’ she said.

ICICI Bank continues to monitor the interest rate on a daily basis and will take necessary measures accordingly, she said. TS Narayanasami, chairman & MD of Bank of India said the banks would revisit interest rate on lending. going by various proactive measures by RBI and the government as banks have to play a role in making available credit affordable to the common man. “The short-term borrowing would become less expensive. These are welcome measures duly taking care of current needs of some sectors which are reeling under pressure in view of the slowdown in economic growth.,’’ he said. Keki Mistry,managing director & vice chairman, Housing Finance Development Corporation said they are waiting for a reduction in the bank interest rates as that will help the institution to lower its cost of funds.

“As soon as it happens —and that is likely to happen in the near future—we will be able to lower our lending rates,’’ he said.

MD Mallya, CMD, Bank of Baroda, said “ The interest rate scenario is likely to go southwards. In my bank’s case we will assess the liquidity before taking a call.”

The RBI’s move to restructure NPAs beyond 90 days is a good sign for the growth of the sector.”