Bank of Baroda reduces interest rates on home loan by 50 bps

Bank of Baroda (BoB) has reduced its home loan rates for new loan seekers/borrowers by 50 basis points. For floating rate loans below Rs 20 lakh, the new home loan rates are in the range of 10 per cent to 11 per cent and for loans above Rs 20 lakh, the new rates are in the range of 10.25 per cent to 11.5 per cent. For fixed rate loan below Rs 20 lakh, the new rates will be in the range of 11.25 per cent to 12.5 per cent and for loans above Rs 20 lakh, the rates will be in the range of 11.5 per cent to 12.75 per cent, said a bank press release.

The cut in interest rates has been done with a hope to generate demand among the housing finance consumers. BoB saw a slump in demand for especially for retail loans, for the first five months of 2007-08.

BoB officials are concerned about the high costs of deposits which offer high interest rates, though there has been a negligible loan growth in the first five months of 2007-08.A There has been a slow down in loan off-take after a series of rate hikes in 2006-07