Corporation Bank cut home loan rates by 25 basis points cross the board on Thursday This is the first bank to cut rates on loans above Rs 20-lakh. Speaking to FE, chairman and managing director, B Sambamurthy said since its liability re-pricing was down, the bank thought it right to pass on this savings to home loan borrowers.
The bank reduced rates for loans up to Rs 20 lakh and with tenures of five to 15 years to 10.25%from 10.5%. For loans above Rs 20 lakhs and similar maturities, the rate is now down to 11.25% from 11.5%. The rates are floating and linked to its PLR, which is currently 13.25%. When asked whether the bank signalled an era of softer rate regime, Sambamurthy said, ?We are not in the business of predicting rates. As of now, we find fundamentals favoring rate cuts.? He further added that liquidity in the system have had its impact on interest rates across the board including short term deposits. According to another senior official the rate on one-year deposits have been easing since early July and it was only logical to narrow down the spreads between lending and deposits rates.The bank has done away with a 500-day deposit scheme that offered 9.75% and has re-introduced one-year deposits at 9% annual rate.
