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Allahabad Bank cuts home loan rate by 0.25%
New Delhi, March 19, 2008
A day after UCO Bank announcing cut in home loan rate,
another public sector lender Allahabad Bank has slashed
housing loan rate by 0.25 percent for both floating and fixed
amounts up to Rs 20 lakh.
"The reduction in interest rate has been given to customers as
the bank has been able to reduce the cost of incremental
deposits, the general market scenario and to boost the demand
in housing loan sector, particularly among small and medium
category borrowers," Allahabad Bank said in a statement to the
Bombay Stock Exchange on Tuesday.
The above reduction will be effective from 1st April on all
fresh sanctions, it said.
Accordingly, the minimum interest on housing loan for
five-year period will be 9.5 percent per annum and maximum
would be 10.50 percent a year for a period of 15 to 25 years
in PLR-linked loans, it said.
Earlier this month, Finance Minister P Chidambaram had
impressed upon the banks to moderate home loan rates.
"I shall certainly bear in mind that there is public demand
that interest rates for borrowers, who borrow (housing loans)
up to Rs 20 lakh, must be lowered."
"I made a number of efforts to impress upon bankers in this
regard ... it is a constant effort that I will have to make...
bankers will have to take a call, RBI will have to take a
call," Chidambaram had said.
The bank is also approaching its Board for further reduction
in Prime Lending Rate to make all PLR-linked loans more
comfortable for its borrowers.
If approved, the proposed reduction in PLR will also become
effective from 1st April, it added.
Allahabad Bank had on 4th September 2007 and 10th February
this year reduced the interest rates on home loans with
cumulative reduction ranging from 1.5 to 1.75 percent across
all tenure of loans over the rates applicable at the start of
the year.
With this fresh cut and a likely reduction in PLR, the benefit
in reduction to the home loan customers would be even more, it
added.
On Monday, UCO bank slashed home loan rates by 0.25 percent
across all tenures.
The new rates ranging from 9.25-11.75 percent are effective
from 15th March.
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