State Bank, ICICI cut home loan rates, waive off processing fee

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State Bank of India (SBI) and ICICI Bank have cut their respective lending rates for home loans to boost housing credit during the festive season. SBI has slashed interest rates by 0.15 per cent for its home loans up to Rs 75 lakh, while ICICI Bank is offering overdraft facility along with home loan.

SBI’s home loan would be available at 9.15 per cent while women borrower will get at 9.10 per cent. The bank has also waived off all processing fees for loans during the festive season ending December 31, 2016.

Similarly, private-sector lender ICICI Bank announced the launch of a credit facility against home loans for salaried customers. Christened ‘ICICI Bank Home Overdraft’, this offering helps a salaried customer to seek loans up to Rs 1 crore for personal needs against his or her property.

This offering provides customers with the dual advantage of a term loan and an overdraft facility. While the term loan provides customers with quick funds for immediate needs, the overdraft facility offers them the flexibility to access funds instantly for expenses, as and when required.

On October 4, the Reserve Bank of India had cut the policy rate (repo rate) by 25 basis points to 6.25 per cent from 6.5 per cent citing easing inflation.

Banks are passing on the rate benefit to customers as they shift from base rate anchor to marginal cost of funds-based lending rate (MCLR); the new loan pricing regime. MCLR was introduced in April 2016. This system was designed keeping in mind the account limitations of the benchmark prime lending rate and base rate regimes.

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