MUMBAI: ICICI Bank has matched its lending rates with that of market leader State Bank of India.
A week after it announced a 25 basis point reduction in its bench mark base rate the bank said that it will continue to maintain the same spread for home loans which means that women and low-income borrowers will get loans at 9.85 per cent which is 10 basis points above its base rate of 9.75 per cent.
For all other borrowers loans will be available at 9.9 per cnet which is 10 basis points above its base rate. The base rate is a benchmark which reflects the cost of funds for a bank and interest rates on most loans are anchored to this rate. A basis point is one hundredth of a percentage point.
While announcing the new rates, the bank said that it will also offer 10 year fixed rate loans at 9.9 per cent for borrowers up to Rs 30 lakh. The 25 basis point reduction in the base rate with effect from April 10, 2015 will benefit all existing customers of floating home loans.
On Sunday, State Bank of India sought to regain its position as the cheapest lender by announcing a 10 basis point reduction in home loans on the back of a 15 basis point reduction in interest rates. The bank said that it will advance loans to women at 8.85 per cent and general borrowers at 8.9 per cent which is the same rate at which the country's largest mortgage financier extends home loans.
On Friday HDFC announced a 20 basis point reduction in its home loan rates at 9.9 per cent.
All banks have brought down their interest rates following a nudge by banking regulator Reserve Bank of India Raghuram Rajan in his policy statement on April 7. Prior to this all the large lenders were providing home loans at 10.1 per cent. Since then lending rates appear to have settled at 9.9 per cent for general borrowers and 8.95 per cent for women.