Private sector mortgage lender Indiabulls Housing Finance today cut home loan rates by a tad 0.15 per cent to 10.25 per cent, following into the footsteps of state-run banks who have slashed lending rates to woo customers during the ongoing festive season.
The new rate is applicable on loans under Rs 25 lakh and will remain in force till November 30, the company said in a statement.
Indiabulls Housing is the first private lender to slash rates after a majority of the Government banks, including SBI, initiated similar moves on retail products over the last two days.
Among the mortgage lenders, SBI, the market leader, offers the cheapest loan at 10.15 per cent.
IDBI Bank and Punjab National Bank have announced attractive home loan schemes for a limited period to attract customers. The Finance Ministry has advised PSU banks to cut lending rates in the retail segment to boost growth.
The move has been introduced even as Reserve Bank has flagged issues on potential troubles on the asset quality front.
Meanwhile, Indiabulls HF said it has received Reserve Bank nod to raise up to USD 200 million through external commercial borrowings (ECB), which will bring down its cost of funds.
"The approval to raise funds through ECB provides us with another option to raise low-cost funds," the company's Managing Director and Chief Executive, Gagan Banga, said, adding overseas funds will be deployed to fund affordable housing projects.