Mumbai: Home loan market leader HDFC Ltd has reduced interest rate on floating rate loans by 0.50 per cent, even as private sector rival ICICI Bank launched floating rate retail loans like auto and equipment loans at 0.5 per cent below the fixed rate product.

While the change in HDFC lending rates will come into effect immediately, ICICI also announced the launch its floating rate retail loans today.

HDFC said the planned rate reduction on fresh loans would be applicable to all disbursements up to October 31. However, there will be no change in the fixed rate home loans, which remains at 13.25 per cent.

On 21 September HDFC chairman Deepak Parekh had said the funding costs have come down and said he expected loan growth in the second quarter of this fiscal at 26-27 per cent for HDFC and 20-25 per cent for the whole fiscal.

ICICI is the first private bank in the country to offer both floating and fixed rate retail loans.

The floating rate is linked to the floating reference rate (FRR), the benchmark used by the bank for pricing floating rate loans to its retail customers, the bank said in a statement.

"With floating rate loans, we are taking another step in the direction of providing innovative solutions to the customer. We expect floating rate loans to appeal to customers who hold a positive outlook on the interest rates," N R Narayanan, head - vehicle loa.


also see : General reports on Banks & Financial Institutions
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