Ahead of festive season, banks roll out special offers

Cut interest rates, processing fees; offer discounts for online shoppers

With credit growth at a four-year low, banks are announcing a slew of offers to woo customers this festive season. These offers aren’t restricted to lower interest rates for retail loans — while some are offering online shoppers extra card points and cash back benefits, others are giving discounts on processing fees.

Punjab National Bank and Federal Bank will offer discounts on interest rates and processing fees on retail loans. ICICI Bank and State Bank of India (SBI) are announcing offers for online shoppers.

Ram Sangapure, executive director, Punjab National Bank, said that the lender may look at offering home loan at the base rate. “We may even waive off the processing fee on the loans. In the auto loan space, we will be looking at bringing it down by 50 basis points,” he added.

IT’S RAINING OFFERS...

• Punjab National Bank and Federal Bank will offer discounts on interest rates and processing fees on retail loans
   
• ICICI Bank and State Bank of India (SBI) are announcing offers for online shoppers
   
• Federal Bank has waived processing fees for loans for any model of the Tata Zest
   
• Ahead of Ganesh Chaturthi, ICICI Bank has introduced offers for online shoppers
   
• Axis Bank was finalising festival offers and would be announcing these soon

For home loans, the bank charges 25-75 basis points more than the base rate of 10.25 per cent, depending on the amount and the rate option. For car loans, it charges 10.5-11.75 per cent, while for two-wheeler loans, the rate is 13.25-14.25 per cent.

With an improvement in demand in the automobile sector in the past few months, banks are increasingly looking at specific offers for loans in this segment. For instance, private sector lender Federal Bank has waived processing fees for loans for any model of the Tata Zest. It is also offering flat 10.9 per cent interest for all auto loans, irrespective of the tenure.

Ahead of Ganesh Chaturthi, ICICI Bank has introduced offers for online shoppers. On the consumer durables front, it has tied up with both online and offline retailers to give 5-20 per cent discounts on payments through its debit and credit cards or net banking.

With banks focusing on e-commerce in a big way, it is expected more offers for online shopping are in the offing. SBI, for instance, is planning to come up with specific offers in this segment for its debit card consumers. “Since the most card spends happen around the festival season, we are looking at coming out with several offers across the categories of consumer durables, lifestyle, apparel, etc, for our consumers. We are looking at e-commerce as actively as other retailers,” said an SBI official.

Jairam Sridharan, head (consumer lending & payments), Axis Bank, said card growth had been rising and to build on this traction, more offers were expected. “We have been seeing growth of about 25 per cent year-on-year in the credit card space and we expect in the festive season, it will be better. As a result, one can expect more offers on the spend side.” He added Axis Bank was finalising festival offers and would be announcing these soon.

Bankers believe though credit off-take was a tad slower last year, with the pick-up in the retail loan space, growth will pick up this year.