Competition to provide home loans; another bank with big offer

KOCHI: Leading public sector bank Bank of Baroda is intensifying competition in the market by announcing a 40 basis points (0.4%) interest rate cut for customers taking new home loans. The revised interest rate for home loans above Rs 15 lakh will start at 8 percent. The interest rate will be determined based on the credit score of the borrower. Women customers will get a 0.05 percent reduction in interest rates.

A BOB spokesperson said that the reduction in interest rates proportional to the change in key rates made by the Reserve Bank of India in April had already been passed on to customers. Existing customers who are tied to the repo rate have benefited. He said that the interest rate cut for new customers is part of the measures to strengthen credit growth.

Reserve Bank to cut interest rates again?

According to a study by SBI Research, the Reserve Bank of India may cut the key interest rate by up to 1.25 percent in the current financial year, considering the uncertainties and slowdown in the global economy. Inflation is expected to come down to close to three percent due to falling fuel prices. The interest rate may be reduced by three-quarters of a percentage point in the monetary policy meetings in June and August. They also say that the Reserve Bank will adopt an approach that emphasizes economic growth.