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February 1, 2007

ICICI Bank increases home loan interest rates, PSU Banks don’t

Filed under: News — admin @ 6:19 am

Mumbai, India, February 2007 - Leading private sector bank ICICI Bank has announced a rate increase of 1% for its floating home loan customers. It remains to be seen if other private sector banks follow suit or use this opportunity to gain share from ICICI Bank. Meanwhile, the Indian Finance Minister has exhorted public sector banks to keep home loan interest rates unchanged. After ICICI’s increase, home loans rates of PSU banks are around 1-1.5% cheaper.
ICICI Bank announced on February 6 an increase of 1% in its Benchmark Advance Rate (I-BAR) and its Floating Reference Rate (FRR) for consumer loans (including home loans) with effect from February 09, 2007. The revised I-BAR will be 14.75% p.a. payable monthly as against 13.75% at present. The revised FRR will be 11.75% p.a. as against 10.75% at present.

For existing floating rate customers, the increase in Floating Reference Rate (FRR) by 1% will be effective from the respective reset dates. The existing fixed rate customers whose loans are fully disbursed, will, however, not be impacted by the increase and their contracted rates will remain unchanged.

The Bank has also announced an increase in interest rates on 80C Fixed Deposits of value less than Rs 0.10 million by 1.25% for 5-year tenor with effect from February 09, 2007. The revised interest rate on 80C FD will be 9.50% p.a. as against 8.25% at present.

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