The state bank of Maharashtra cut interest rates on home loans by 30 to 70 basis points from Monday, bucking the trend of rising interest rates. The bank cut the cost of personal loans by 245 basis points.
The bank said that by lowering the cost of retail loans, it hopes to boost customer morale during the holiday season.
Bank home loans are now available at a minimum annual rate of 8%, while personal loan rates have fallen from 11.35% to 8.9%.
Previously, consumers with credit scores above 800 could get a home loan at the lowest possible rate of 8.30%. Borrowers with credit scores of 700 or higher paid 8.7%.
According to a bank spokesperson, the Pune-based lender has now opted to offer rates of 8% to customers with a minimum of 700 credit scores.
As part of the “Diwali Dhamaka” promotion, the bank has already waived loan processing fees for gold, houses and cars.
Compared to many players in the banking industry, the BoM’s net interest margin (NIM) for the June quarter was better at 3.28%, allowing the lender to use aggressive loan pricing. For the months of April and June, the State Bank of India’s domestic business NIM was 3.15% and its global NIM was 2.92%.
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