HDFC cuts rates by 50 bps

MUMBAI: HDFC has reduced home loan rates by 50 basis points (bps) during this festival season. The company is offering discount till the end of this month on a floating interest rate loans.

However, the new will be useful to only those borrowers who are availing of disbursement in October. According to the new festival rates, HDFC will be charging 9.25% for loans up to Rs 10 lakh and 9% for loans above Rs 10 lakh. In case of ICICI Bank, the immediate rival in the housing finance business, the rack rate is 9.25% for all floating rate loans irrespective of tenure and the loan size.

However, sources said that the rates are negotiable and the bank is offering loans at 9%, but on floating interest rate basis. Meanwhile, other banks like State Bank of India and Punjab National Bank too are offering a discount of 50 and 25 bps, respectively, on floating interest rate loans on account of Hindu festival.

SBI will charge 8.75% for loans between 5-15 years and 9.25% for loans above 15 years. Besides, the bank has also reduced the processing fee by 50% and reduced the margins on loans from 85% to 90%. However, all the reduction in rates are only for those availing of floating interest rate loans.

Bankers expect a spurt in retail loans during the festival season. Over the last few months, there has been a slowdown in the housing loans segment, partly on account of rising interest rates and property prices. Among other businesses that banks are looking at expanding during the season is retailing of gold with several of them launching special schemes ahead of Dhanteras ? a day where North Indians traditionally buy gold.

The latest to launch a scheme is Union Bank of India which has announced sale of gold coins with 99.99% purity weighting 5 gms, 8 gms and 10 gms. The scheme would be launched in 15 centres across the country.

Source: The Economic Times