ICICI Bank cuts new home loan rates by 25-50 bps

A day after public sector Bank of Baroda (BoB) and Union Bank of India  cut their benchmark prime lending rates (BPLRs) by 50 basis points to 12 per cent, private sector major ICICI Bank today announced a 25-50 basis point reduction in its home loan rates.

Post cut, the new rate for home loans of up to Rs20 lakh stands at 9.75 per cent, 10 per cent for loans in the Rs20-30 lakh range and 11.50 per cent for above Rs30 lakh.

The reduction, which comes close on the heels of the Reserve Bank of India (RBI) cutting its key interest rates, will be effective from the next financial year beginning 1 April 2009.

Currently, the State Bank of India (SBI), the country's largest lender, has fixed its prime lending rate (PLR) at 12.25 per cent, 25 basis points above the revised rates of BoB and Union Bank.

ICICI Bank, the erstwhile lead player in the retail loan market, seems to have lost its hold on the the retail market although it is still a big competitor to rival HDFC.

The State Bank of India has reduced its rate for new home loans to 8 per cent for the first year while another state-run bank Canara Bank offers home loans at about 8.25 per cent for the first year and at 9.25 per cent for the next four years.

The downward revision in banks' retail lending rates follow rate cuts announced by the Reserve Bank of India a day earlier.

The RBI had cut its repo and reverse repo rates to 5 per cent and 3.5 per cent, respectively with immediate effect.