Banks eyeing the festive season with cheaper loans Bank of India and State Bank of India are among the others which have offered concessional interest rate on home loans and waived processing charges
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To add sparkle to the upcoming festive season, state-run Bank of India plans to provide home loans at concessional interest rates with no processing charges.
While interest rate on loans up to INR 30 lakh will be around 8.35%, loans above INR 30 lakh would be linked to repo rate at which the Reserve Bank of India lends to commercial banks.
The bank also plans to offer education loans at competitive rates, media reports said quoting a Bank of India official.
The move to offer cheaper loans from the state-run bank comes at a time when the economy is going through a slowdown. Last week, government officials also met representatives from public sectors undertakings such as ONGC, NTPC, IndianOil, among others, and directed then to push the capital expenditure plans. In addition, they were told to pay outstanding amounts to vendors so that there is churn in the economy.
"The bank has also launched an SME welcome offer wherein loans between INR 50 lakh and INR 5 crore would be available at a concessional rate depending on the value of security," the bank official was quoted.
Bank of India joins the league of State Bank of India which last month announced cheaper rates for home and auto loans. State Bank of India offered to waive processing fees and pre-approved digital loans to customers.
State Bank of India on Monday also reduced its Marginal Cost of Funds based Lending Rate by 10 basis points which will come into effect from September 10 make the one-year MCLR at 8.15%.
The Reserve Bank of India has instructed banks to link new floating rate loans-- personal or retail--and floating rate loans to micro and small enterprises from October 1 to external benchmarks as the central bank believes rate cut benefits are not passed on to consumers fully. The central bank has reduced its benchmark repo rate by 110 basis points since February.