IDBI cuts home, car loan rates; ups interest on term deposits
30 Sep 2009
State-owned IDBI Bank has used the festival season to slash its rates on home and car loans and hiked the rates for retail term deposits in a 'festival bonanza offer' starting on 1 October.
The bank has reduced the home loan floating interest rates by 25-50 basis points, and the slabs are realigned. For a loan of up to Rs30 lakh the rate of interest will be 8.75 per cent per annum; for Rs30-50 lakh the rates will be 9 per cent, and for loans of above Rs50 lakh it will be 9.25 per cent.
As a part of its offer, IDBI Bank has extended the facility of funding of interest on home loans during the construction period for loans taken between 1 October and 31 December 2009.
The bank has revised the fixed interest rate on auto loans downwards by 50 basis points. On loans taken between 1 October and 31 December, a floating rate of interest at 8.50 per cent in the first year and 3 per cent below the BPLR (minimum 9.75 per cent) in the remaining four years of the loan is being offered.
The bank has revised upwards the interest rate on retail term deposits by 25 bps from 6.25 per cent to 6.50 per cent in the maturity bracket between six months and one year for deposits made during the offer period as above.
Additional interest rate applicable for senior citizen is 50 basis points above the normal interest rate. Penalty of 1 per cent on premature withdrawal of deposit is applicable.
"We expect to grow our auto loan portfolio from the present Rs3-4 crore to Rs200 crore by the end of March 2010," said C S Jain, head of personal banking group at IDBI, in Mumbai yesterday.
Home loans have the largest share in the bank's personal banking portfolio. The size of its housing loan portfolio is about Rs12,000 crore, Jain said.
The bank's retail business comprises of three verticals - agricultural assets and liabilities, small and medium enterprises, and personal banking. The bank aims to increase its retail deposits base to Rs67,000 crore by the end of March 2010 from the current base of Rs50,000 crore.
The bank has also started giving personal unsecured loans in the last two or three months after having discontinued its personal loan business last year. Jain said the bank had stopped personal loans as there were huge delinquencies. Now it has restarted such loans but only on salary accounts. The bank charges up to 16 per cent interest on personal unsecured loans.
