ICICI Bank offers cashback on home loan EMIs

In a bid to attract customers, private sector lender ICICI Bank has added a cashback feature to its home loans whereby borrowers will receive an amount equivalent to 1 per cent of their annual repayment.

However, the cashback for the first three years will be paid only at the end of the third year while borrowers will continue to get cashbacks every year thereafter.

Cashbacks on repayments will be applicable to all new home loans taken out by both resident as well as non-resident borrowers.

"This new home loan empowers borrowers to select their preferred mode of cashback. They can choose to utilise the cashback to prepay the principal outstanding of their home loan or take credit in their ICICI Bank account," the bank said in a statement.

A borrower who avails of a Rs30 lakh loan for 30 years will pay an EMI of Rs22,749 annually. At the end of the third year he will get a combined cashback of Rs8,189 for the first three years and Rs2,720 every year thereafter.

Cashback will not be available to defaulters.

"We have the largest mortgage portfolio among private sector banks in the country. We foresee that a combination of young population and rapid urbanisation will lead to the emergence of growing demand for housing in the country. We believe that this proposition will propel customers to fulfill their aspirations of owning a home," said Anup Bagchi, executive director, ICICI Bank.

Cashback will be available on loans of any amount for tenure ranging from 15 - 30 years. The facility will also be offered to loan refinancing by ICICI Bank.

The cashback will start accruing from the first EMI itself. It will first get credited to the customer after completion of 36th EMI. Subsequently, after every 12th EMI, it will get credited to the customer.

Banks faced with a slowdown in credit growth is looking for innovative ways to drive growth. Year on year loan growth of scheduled commercial banks in the country stood at 6.9 per cent as on 15 September, as per data released by the Reserve Bank of India (RBI).

During the first four months of FY18 (up to July) home loan growth slowed down to 0.4 per cent with the housing portfolio of banks increasing by a mere Rs3,600 crore to Rs8.64 lakh crore.