An aggressive rate cut across its retail loan segments by the leading private sector lender, HDFC Bank, is said to trigger a similar review by other major private banks.
Speaking to FE other private sector banks said that they are adopting wait-and-watch policy for the moment before taking a call on altering their existing loan rates to compete in the prevailing scenario.
With effect from Monday, HDFC Bank has lowered its auto loan and commercial vehicle loan rates by 125 basis points to 12-12.5% and 13.75-14.25%, respectively. The loan against property is cheaper by 200 basis points and is offered at 13.25- 13.75 %, and personal loan interest rates have been reduced by 100 basis points to 16.5-17%.
On December 15, 2008, HDFC Bank reduced its BPLR by 25 basis points to 16.25% and on January 1, 2009, it lowered its BPLR by 25 basis points to 16%.
Presently ICICI Bank, Axis Bank, and IndusInd Bank offer auto loans at 15%, 12.5-14.5% and 13.5-15% respectively. ICICI Bank and Axis bank offer personal loans at 19.5% and 12.5-15% respectively. IndusInd Bank does not offer personal loans as well as loans against property. ICICI Bank and Axis Bank offer loans against property at 16.25-16.75% and 11-13%, respectively.
On Friday HDFC, the largest mortgage lender introduced a ?special disbursement offer? on the new floating home loan customers.
Under this special offer, loans for up to Rs 30 lakh will be available at 9.75% while loans above Rs 30 lakh will be at 10.75 %. The step follows the deposit rate cut by the mortgage lender by 0.50% to 0.75% on January 15, 2009.This is a limited period offer for its new floating rate home loan customers.
Though the public sector banks have recently launched special home loan package under which they are charging a fixed interest rate of 8.5% for loans upto Rs 5 lakh and 9.25% for loans between Rs 5 lakh-Rs 20 lakh but, there is no relaxation in the norms for home loans above Rs 20 lakh.
