Recently, almost all banks hike rates for home and car loans in India. In this series, the HDFC Bank, the ICICI Bank and the Kotak Mahindra are the main player. The banks have raised rates on home and auto loans.
About the hike, Economictimes.indiatimes.com which is the India’s news portal writes, “These private banks have raised lending rates by as much as 100 basis points, following the hardening of market rates even as the central bank holds on to low rates to avoid derailing the economic growth. A basis point is 0.01 percentage point. RBI has started slowly rolling back some liquidity-boosting measures and has indicated it may not hesitate to raise rates. It raised the cash reserve ratio by 75 basis points in the last review.”
Further the news paper quote a statement of Pralay Mondal who is the country head in HDFC Bank of retail assets & credit cards, “The increase in the cost of funds is being passed on to customers. It has been done to protect our margins.”
On the other hand, Kamlesh Rao who is the retail assets head in Kotak Mahindra Bank said to the news paper, “We had increased fixed deposit rates by 75 bps in the past couple of months. The increase in lending rates is to align it with the rise in deposit rates.”
About the new charges, the news portal writes, “ICICI Bank will now charge 8.75% for loans up to Rs 30 lakh, 9% between Rs 30-50 lakh and 9.5% for loans over Rs 50 lakh. It was earlier offering loans at 8.25% for two years. From the third year it would have been floating reference rates minus 3.5%.
The bank has also hiked its auto loan rates by 25-50 bps from March 5, thus increasing the rack rates to 9.75-11%. HDFC’s home loan rates have reverted to 8.75% for loans up to Rs 30 lakh, 9% for loans between Rs 30 lakh and Rs 50 lakh and 9.25% for loans over Rs 50 lakh. Till last month, it was offering loans at a fixed rate of 8.25% up to March 31, 2012, after which the loan would revert to the prevailing floating rate.
Kotak Mahindra has increased its auto loan rates by 50-100 bps. With this hike for super premium cars, the rates would now be 9.25-9.75%. For premium segment cars it would go up to 10-10.25% while for lower end cars the rates would be 10.75-11%.”
The hike is due to Reserve Bank of India policy rates change. During the Union Budget 2010-11 presentation, there was a symptom of hiking in the loan rates. The hike will create more crisis and inflation in Indian economy rather than relaxation.
About the hike, Economictimes.indiatimes.com which is the India’s news portal writes, “These private banks have raised lending rates by as much as 100 basis points, following the hardening of market rates even as the central bank holds on to low rates to avoid derailing the economic growth. A basis point is 0.01 percentage point. RBI has started slowly rolling back some liquidity-boosting measures and has indicated it may not hesitate to raise rates. It raised the cash reserve ratio by 75 basis points in the last review.”
Further the news paper quote a statement of Pralay Mondal who is the country head in HDFC Bank of retail assets & credit cards, “The increase in the cost of funds is being passed on to customers. It has been done to protect our margins.”
On the other hand, Kamlesh Rao who is the retail assets head in Kotak Mahindra Bank said to the news paper, “We had increased fixed deposit rates by 75 bps in the past couple of months. The increase in lending rates is to align it with the rise in deposit rates.”
About the new charges, the news portal writes, “ICICI Bank will now charge 8.75% for loans up to Rs 30 lakh, 9% between Rs 30-50 lakh and 9.5% for loans over Rs 50 lakh. It was earlier offering loans at 8.25% for two years. From the third year it would have been floating reference rates minus 3.5%.
The bank has also hiked its auto loan rates by 25-50 bps from March 5, thus increasing the rack rates to 9.75-11%. HDFC’s home loan rates have reverted to 8.75% for loans up to Rs 30 lakh, 9% for loans between Rs 30 lakh and Rs 50 lakh and 9.25% for loans over Rs 50 lakh. Till last month, it was offering loans at a fixed rate of 8.25% up to March 31, 2012, after which the loan would revert to the prevailing floating rate.
Kotak Mahindra has increased its auto loan rates by 50-100 bps. With this hike for super premium cars, the rates would now be 9.25-9.75%. For premium segment cars it would go up to 10-10.25% while for lower end cars the rates would be 10.75-11%.”
The hike is due to Reserve Bank of India policy rates change. During the Union Budget 2010-11 presentation, there was a symptom of hiking in the loan rates. The hike will create more crisis and inflation in Indian economy rather than relaxation.
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