Axis Bank cuts home loan floating rate by 50 bps; SBI awaits RBI policy

Mumbai: Private sector Axis Bank (formerly UTI Bank) has reduced floating interest rates of home loans by 0.50 per cent for existing and future customers, even as the State Bank of India (SBI) said it could give discount to new housing credit seekers in the festival season and might cut home loan rates.

"If it needs to be revised, obviously it would be revised downward," SBI chairman O P Bhatt said, adding that the bank would consider either cutting the interest rate or offering festival season discount.

Banks usually acquire fresh customers by offering a lower rate on floating loans "but we want to maintain a parity between both our existing and future customers," Imtiaz Ahmed, assistant vice president of Axis Bank, said.

The floating rate will come down from 11 per cent to 10.5 per cent for both categories, beginning October 1, Ahmed said. The bank has, however, kept fixed rate home loans at 13 per cent.

"We have no immediate plans to have a re-look at our fixed rate," Ahmed said, adding that nearly 95 per cent of the bank''s home loan customers were opting for floating rate.

A clutch of banks, including Bank of Baroda, Union Bank of India, Canara Bank and IDBI Bank, has reduced their home loan rates in the last one month. While some have offered reductions in view of the ongoing festival season, others have done so to keep pace with competition.