Loans to get cheaper, SBI, HDFC, Federal Bank cut lending rates
Accordingly, interest rate on two-wheeler loans would be adjusted to between 19.25 per cent to 22.25 per cent.
With regard to commercial vehicles, the rate on heavy commercial vehicle will be down by 0.25 per cent to 11 per cent while rate for light commercial vehicle will get reduced to 13.75 per cent from existing 14 per cent.
The auto loan portfolio of the bank currently stands at about Rs 33,000 crore. The auto loan advances of the bank has been witnessing a growth of 12 per cent.
IDBI Bank has already lowered its base rate by 0.25 per cent to 10.25 per cent effective February 1.
SBI, which has the most aggressive offering among the domestic banks, had last cut its base rate by 0.25 per cent last September following the two CRR cuts by RBI earlier.
The largest bank, has however, not cut its deposits rates as the banks asset liability committee felt its offering is among the lowest in the market at present, the official said.
"We are gaining around Rs 275 crore and passing around Rs 350 crore...this will have a very negligible impact on our margins," the SBI official said, adding the outstanding loans under the old benchmark prime lending rate will also go down by a similar 0.05 per cent.
A majority of bankers said they would transmit the benefits of the
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