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The second largest private sector lender of India, ICICI Bank has announced the reduction of interest rates in its new home loans by 25-50 basis points. As per a statement of bank, home loans up to Rs 20 lakhs will have interest rate of 9.75 percent as against the earlier 10 percent. Similarly, the bank will charge an interest of 10 percent for home loans in the range of Rs 20-30-lakh. Earlier the interest rate for this section was 10.5 percent.
Home loans of more than Rs 30 lakhs will carry an interest rate of 11.5 percent as against the earlier 12 percent. While informing about the new interest rates, ICICI Bank spokesperson stated that the reduced rates will be applicable only to new home loans. However, ICICI has not changed its prime lending rate (PLR). Earlier the banks had lowered its benchmark rate by 50 basis points to 16.75 percent along with the reduction in floating reference rate to 13.75 percent.
Earlier in the week, the Reserve Bank of India (RBI) had lowered its short-term lending and borrowing rates by 50 basis points each. The central bank said that it brought the cuts as India's growth rate has been hit badly by the global financial crisis and downturn. The recent move by RBI has helped ICICI Bank to bring cuts in its home loan rates.
