Two days after the Reserve Bank of India pared the benchmark lending rate, ICICI Bank, the country?s largest private sector lender, has cut its floating rates on new home loans by 0.25-0.50 basis points from Friday.
A spokesperson for the bank said the new interest rate on priority sector home loans below Rs 20 lakh is 9.75% against 10% before. For loans in the range of Rs 20-30 lakh, the interest rate is cut to 10% from 10.50% earlier.
For loans of above Rs 30 lakh, the interest rate has been reduced to 11.50% against the earlier 12%.
The bank has, however, excluded its existing home loan borrowers from the rate cut. The reduced rates are applicable only to new home loans, the spokesperson said.
The bank has been slow to respond to the series of reductions in the repo rates by RBI in recent months. Leading public sector banks, including State Bank of India, Punjab National Bank and Canara Bank have revised their retail rates more than once in last few months.
This time, ICICI bank has limited the rate cut to home loans, leaving out the auto loan segment. The home loan business is seen as a safe avenue, as delinquency rates are far less in this segment than in other retail loan segments.
The bank has also not altered its prime lending rates.
Analysts believe that the bank, an aggressive player in retail loans till the eruption of the global financial crisis, has become extremely cautious in recent months, and may play safe till clearer trends emerge on the current situation.
Earlier, the Bank, which saw a fall in profit growth and a rise in its non-performing assets, had said it would like to conserve capital in the current atmosphere. Its CEO-designate Chanda Kochhar had said the bank?s decision to bring its lending rates down depended on the cost of the funding.