The State Bank of India (SBI) on
Thursday announced a reduction in interest rates on home and automobile loans
by 0.05% (five basis points - bps).
The rates will be 8.30% for home loans
up to Rs 30 lakh - the lowest in the industry and its car loan rates will be
8.7%.
Home loan rates have been reduced for 5
bps across all brackets, the SBI said in a statement.
Car loan amount ranges from 8.70% to
9.20% compared to earlier range of 8.75% to 9.25% . “The exact rate depends on
the amount of loan and the credit score of the individual,” the statement said.
The new rates came into effect from
November 1, 2017.
Only new customers will be benefited
from the rate reduction, as the lender has not reduced its marginal cost of
fund based lending rate (MCLR), which is at 8%.
“With this reduction in rates, we are
offering lowest rates for most of our product offering in the retail loans,”
said P.K. Gupta, managing director, retail and digital banking, SBI.
“Lower rates along with wide
distribution network and use of digital technology to enhance customer
experience is a perfect package for any retail loan customer,” he said.
The move comes days after the
government announced a recapitalisation package for the public sector banks and
made its intention clear to boost economic growth.
The rate cut by the SBI, which is expected to be
followed by others, is aimed at boosting retail credit growth. While overall
credit growth has been 5% year-on-year, home loans are growing at a healthy
rate of 13.2%, the latest RBI data shows.
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