ICICI Bank, the largest private sector lender, has announced a 0.10% reduction in home loan rates for a limited period, bringing them on par with bigger rival State Bank of India.
ICICI Bank will offer home loans of up to Rs. 75 lakh at 10.15%, the same rate as SBI, between May 15 and June 30.
For women borrowers, the Chanda Kochhar-led bank will offer housing loans under Rs. 75 lakh at 10.10%, it said on its website.
Loans above Rs. 75 lakh will be available between 10.50 and 11.25%, the bank added. SBI offers these loans at 10.30%.
These are floating rates, which will change as per the base rate or minimum rate of lending at the bank.
To protect borrowers from fluctuations, ICICI also introduced limited-period products offering a fixed interest rate for one and two years, which will turn into floating-rate loans aligned with the base rate.
A borrower will pay 10.25% for loans up to Rs. 75 lakh for the fixed period, after which it will go up to the base rate plus 0.25%.
The bank also introduced a renewable fixed-rate product, under which the pricing will get renewed for a fixed period periodically.
ICICI Bank had registered a 23% growth in its outstanding mortgage book in FY14, which outpaced its overall 14.8% growth in advances.
Following a gloomy economy that resulted in a slowdown in demand from companies and concerns about asset quality, many banks have shifted focus to the retail segment, which is still showing demand.
The share of retail loans in ICICI Bank's book grew to 39% as of March 2014 as against 37% in the year-ago period. Home loans accounted for over half of the retail book.