Reserve Bank of India’s initiative to cut repo rates for two consecutive monetary policy has proven beneficial for home buyers, as following the rate cut almost every leading banks and housing finance companies have reduced their interest rates lending rates and home loans.
With effect to the rate cuts banks and HFCs have reduced their rates by 15-25 bps. State Bank of India, HDFC lowered their rates by 15 bps, SBI is providing a rate of 9.85 per cent to women home loan borrowers and 9.90 per cent for other borrowers, whereas ICICI Bank reduces it by 25 bps at rate of interest of 9.90 per cent.
Axis Bank lowered interest rates by 20 bps to 9.95 per cent home loan interest rate, while Kotak Mahindra Bank announced 15 bps cut in the base rate their current rate is 9.85%, Lakshmi Vilas Bank announced cuts of 15 bps. United Bank and Union Bank of India have lowered their base rates by 25 bps each.
Even small housing finance institutes have announced rate cuts, Indiabulls Housing Finance (IBHFL) reduced interest rates of its home loans by 20 basis points to 9.90% and Sundaram BNP Paribas Home Finance has also announced a reduction of 20 basis points in its prime lending rates.
The March month consumer price index-based inflation (CPI) stood at 5.17 percent from 5.37 percent in February 2015, the CPI eased to a three month low. The experts predict this can lead to a further announcement for rate from the central bank.
In a statement Chandrajit Banerjee, director general of the Confederation of Indian Industry (CII), had asserted that, “Inflation has in declined when compared to the previous month, This should persuade the RBI to resume its rate easing cycle to support growth without being too concerned about the impact on inflation.”
If the RBI implements further rate cut in the next monetary policy announcement more banks and HFCs can follow the motion and reduce their lending rates.
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