The State Bank of India (SBI) on Wednesday reduced interest rates on auto loans, slashed processing fees and launched consumer loan products for salaried employees, while Dena Bank lowered home loan and auto loan rates. The banks joined a clutch of other public sector banks that announced rate cuts to lure the customers in the ongoing festival season.
The country’s largest lender, SBI, has slashed interest rate on auto loans by 0.20 percentage points to 10.55% against the earlier 10.75%.
“Processing charge has also been cut from 0.51% of the loan amount with a minimum of Rs. 1,020 to a flat rate of Rs. 500,” SBI said in a statement.
SBI has also launched a special festival loan for its salary account holders for purchase of consumer durables and two-wheelers.
Dena Bank has cut interest rates on car loan by 1 percentage points to 11% from 12%. It has pegged its home loans at 10.25% for loans up to Rs. 1 crore.
For consumer loan, in case of tie-up under corporate salary scheme rate of interest has been reduced by 1 percentage point to 12%.
On Tuesday, Punjab National Bank, IDBI Bank and Oriental Bank of Commerce announced rate cuts or waived the processing fee on some loans as part of their festival offers.
The decision to cut interest rates on auto and consumer durable loans comes nearly a week after the government decided to pump in funds in public sector banks so that they can lower rates to stimulate demand in the targeted sector.