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INDIA BUSINESS WORLD -1st JANUARY - TO - 15th JANUARY - 2009
ICICI LOANS CHEAPER BY 50 BPS
THE new year has begun on a positive note for home loan borrowers. The country's largest private lender, ICICI Bank, has announced a half-percentage point reduction in its prime lending rate (PLR) to 16.75%. The rate cut, which comes into immediate effect, would benefit all home and auto loan customers who have opted for floating rates on their loans.
In a statement issued here, ICICI Bank said it had lowered its PLR to 16.75% from 17.25%. Deposit rates have been lowered by 50-75 basis point across maturities. The second-largest mortgage company—LIC Housing Finance (LICHF)—too has reduced its PLR from 14.5% to 13.75%, bringing down the cost of borrowing for new and existing customers. The company now offers loans up to Rs 20 lakh at as low as 9.25% and up to 9.75%, depending on the tenure. For loans above Rs 20 lakh, LICHF charges 11.25% irrespective of the tenure. Among smaller lenders, Bank of Rajasthan has reduced its PLR to 15.5% from 16% with effect from January 1.
"The trend is that interest rates are heading southwards, so home loan rates are also likely to come down in the coming months," said ICICI Bank joint MD & CEO-designate Chanda Kochhar. "How much they will actually fall will depend on how much deposit rates move," she added.
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