By IANS
Mumbai : The interest rate cut in home loans announced by Housing Development Finance Corp (HDFC) is unlikely to lead to more such cuts by other banks in the housing finance sector.
HDFC, one of the leaders in the home finance sector, Thursday brought down its prime lending rate to 13.75 percent from the earlier 14 percent.
When asked about the possibility of slashing home loan interest rates, a spokesman for ICICI Bank told IANS Friday: “We have not taken any decision in this regard so far. Moreover, interest rate is not the only factor involved in the lending business. A host of other factors are involved.”
Chairman and managing director of Union Bank of India (UBI) M.V. Nair said: “We have no plans to cut our rates as we had already restructured it sometime back. Unlike HDFC we do not have a high interest rate.”
UBI’s current home loan rates are 10.75 percent for fixed rates and 10 percent for floating rates.
The Reserve Bank of India’s quarterly review of monetary and credit policy Tuesday had suggested banks could lower of interest rate since they have ample liquidity.
“That is true but then we do not need to bring down the interest rate immediately,” Nair said.
Bank of India’s (BOI) chairman and managing director T. S. Narayanasami voiced similar sentiments.
“We may go for a revision in the home loan interest rate but that will not be now,” he said.
“Our interest rate as compared to HDFC is quite low so we don’t need to go for a change.”
BOI’s floating home loan interest varies between 9.50 percent and 10.50 percent depending on the term of the loan.
“In the current situation, we can meet the cost of funds. Regarding the slowdown one needs to watch and analyse the scenario before taking further steps,” Narayanasami said.