10.25 % its base rate for all housing
loans,
irrespective of the tenor & amount of the loan
Bank of Baroda (BoB), India’s IInd largest bank, on
June 4, 2013 did away with differential rates for housing loan borrowers.
It is to now charge 10.25 % its base rate for all
housing loans, irrespective of the tenor &
amount of the loan. It’s the first bank to do so.
Most banks charge different interest rates for housing
loans up to Rs. 30 lakh and for those above Rs. 30 lakh.
Mr. Ranjan Dhawan, Executive Director, BoB, said they
wanted to raise the average size of home loans.
State Bank of India (SBI), the largest BANK, has the
lowest housing loan rates in India. It charges 9.95% for those below Rs. 30
lakh and 10.10% above Rs 30 lakh. It also has the largest share in the housing
loan market.
Mr. Ranjan Dhawan said, ''BoB planned to grow its lending by 18% to
19% this year (2013), a little above the sector average. He said interest rates
on high value deposits had come down in the last month, enabling the government
owned lender to have lowered the rates in home loans.There are no conversion
charges for existing customers to get the benefit of the reduced rate”
SBI, however, charges conversion fees to existing
borrowers if they want to shift rates. An earlier customer’s rate changes only
if the bank changes its base rate. The conversion fee is 1% of the unpaid loan
amount.
As of March, 2013 Bank of Baroda had a housing loan
portfolio of Rs. 16,045 crore, which had grown 13.5 % year on year.
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