 "Banks gear up to offer cheap retail loans during festive season")
Banks are gearing up for the festive season by offering concessions in interest rates for retail loans. While some banks have already launched their special schemes for the season, others are offering loans at their base rate. There are also other banks considering to launch their schemes.
During the festive season banks typically record a 20-25 per cent year-on-year growth in retail loans. This year, too, banks are hopeful of achieving those growth levels. Federal Bank on Tuesday announced that in August-September, it would offer a uniform concessional interest rate of 10.25 per cent for all housing loans, regardless of the amount and period. Car loan rates start from 10.25 per cent. No processing fee will be levied on housing loans and car loans during the period.
Some banks have launched schemes earlier and are seeing good response."We launched our schemes from June and customers can take the advantage of these schemes till end-September. So far, the response has been very good. We may even extend these schemes beyond September," said K Rama Murthy, general manager (retail), Corporation Bank.
Union Bank of India reduced their base rate last month by 25 basis points to 10 per cent. The bank is offering home loans up to Rs 75 lakh at the base rate and loans above Rs 75 lakh are offered at 10.25 per cent.
Vehicle loans are offered at 10.45 per cent. "We are expecting a growth of 25 per cent in retail loans this fiscal. Last fiscal, the growth was about 22 per cent," said P K Bansal, general manager (retail). Last month, the Reserve Bank of India (RBI) had taken steps to squeeze out liquidity from the system to fight rupee slide. Due to the squeeze, some banks are yet to roll out their schemes.
According to Bhupinder Nayyar, executive director, Oriental Bank of Commerce (OBC), the feedback from branches indicates a rise in demand (for loans) during the festive season. Asked if OBC would offer any special interest rebate, he said it would depend on the liquidity conditions. Deceleration in credit growth was observed in all major sectors in June, except for retail loans, shows RBI data. On a year-on-year basis retail loans grew by 15.6 per cent as compared with an increase of 13.9 per cent in June 2012.
Banks' advances rose by Rs 6,861 crore to Rs 54,05,248 crore in the fortnight ended July 26, according to RBI. The year-on-year pace of credit disbursal was 14.9 per cent. The loan book of the banking system had shrunk by Rs 16,620 crore in the previous fortnight (July 12).
During the festive season banks typically record a 20-25 per cent year-on-year growth in retail loans. This year, too, banks are hopeful of achieving those growth levels. Federal Bank on Tuesday announced that in August-September, it would offer a uniform concessional interest rate of 10.25 per cent for all housing loans, regardless of the amount and period. Car loan rates start from 10.25 per cent. No processing fee will be levied on housing loans and car loans during the period.
Some banks have launched schemes earlier and are seeing good response."We launched our schemes from June and customers can take the advantage of these schemes till end-September. So far, the response has been very good. We may even extend these schemes beyond September," said K Rama Murthy, general manager (retail), Corporation Bank.
Union Bank of India reduced their base rate last month by 25 basis points to 10 per cent. The bank is offering home loans up to Rs 75 lakh at the base rate and loans above Rs 75 lakh are offered at 10.25 per cent.
Vehicle loans are offered at 10.45 per cent. "We are expecting a growth of 25 per cent in retail loans this fiscal. Last fiscal, the growth was about 22 per cent," said P K Bansal, general manager (retail). Last month, the Reserve Bank of India (RBI) had taken steps to squeeze out liquidity from the system to fight rupee slide. Due to the squeeze, some banks are yet to roll out their schemes.
According to Bhupinder Nayyar, executive director, Oriental Bank of Commerce (OBC), the feedback from branches indicates a rise in demand (for loans) during the festive season. Asked if OBC would offer any special interest rebate, he said it would depend on the liquidity conditions. Deceleration in credit growth was observed in all major sectors in June, except for retail loans, shows RBI data. On a year-on-year basis retail loans grew by 15.6 per cent as compared with an increase of 13.9 per cent in June 2012.
Banks' advances rose by Rs 6,861 crore to Rs 54,05,248 crore in the fortnight ended July 26, according to RBI. The year-on-year pace of credit disbursal was 14.9 per cent. The loan book of the banking system had shrunk by Rs 16,620 crore in the previous fortnight (July 12).