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| Private lenders hike auto loan rates, end teasers |
| Press Trust of India / Mumbai Mar 04, 2010, 17:20 IST |
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Country's two leading private lenders ICICI Bank and HDFC Bank today raised lending rates for auto loans, in a clear signal that rates would harden in the coming days.
Mortgage major HDFC and ICICI Bank also discontinued with their special home loan schemes, which offer lower interest (teaser) rate for the first few years of the credit period. An HDFC spokesperson when contacted confirmed to PTI that the lender is not continuing with the special offer which was valid only up to February 27.
Country's largest private sector lender ICICI Bank also said it has hiked auto loan rates by up to 50 basis points. It withdrew the 8.25 per cent special home-loan scheme. Similarly, HDFC Bank has increased auto loan rates by 25-50 basis points.
The Reserve Bank of India (RBI) had expressed displeasure at teaser rates as it discriminates existing borrowers against new ones.
"Auto loans rates have been raised by 0.25-0.50 per cent depending on segment and tenor with effect from March 5," an ICICI Bank spokesperson said.
Following the hike, interest rates for new auto loans will now be in the range of 9.75-11 per cent.
ICICI Bank also withdrew its special home-loan scheme, under which it offered home loans for 8.25 per cent fixed rate for two years, effective from March 1, the spokesperson added.
On home loans, ICICI bank is currently offering home loans for up to Rs 30-lakh at 8.75 per cent, loans between Rs 30-lakh to Rs 50-lakh at 9 per cent and those above Rs 50-lakh, at 9.50 per cent.
Another private sector lender, Kotak Mahindra Bank and the group's car loan financing arm also announced hikes in their home and car loan rates respectively today.
While Kotak Mahindra Bank has hiked its home-loan rates by 0.25-0.5 per cent with effect from February 18, Kotak Mahindra Prime, which is the dedicated car financing arm of group, has hiked its loan rates by 0.5-0.75 per cent.
"We decided to hike the interest rates for home-loans by 0.25-0.5 per cent. This is primarily to align lending rates in line with the cost of deposits," Kotak Mahindra Bank's Head (Retail Assets) Kamalesh Rao said.
The bank's home-loan portfolio grew by 50 per cent in the current year, he said.
Kotak Mahindra Prime's Chief Executive Officer, Sumit Bali, said the hike in lending rates will come in to effect from March 8.
"We are hiking the lending rates as the cost of funds have gone up by up to 0.75 per cent. We have to pass on this additional cost to customers, which we didn't do last month" Bali said.
Kotak Mahindra Prime has a a total loan-book of around Rs 6,500-crore, which grew by around 35 per cent in the current financial year. Moving ahead, the company expects a loan growth in the range of 15-20 per cent, Bali said.
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