Kotak Mahindra Bank (KMB) is offering lower interest rates on home loans and business loans along with few discounts on processing fees as a part of the monsoon bonanza.
”Customers can now avail home loans at a special interest rate of 9.35% pa, and business loans/overdraft up to 1% lower interest rate with 25% waiver on processing fees. Additionally, Kotak Mahindra Prime, the 100% subsidiary of KMB, is also offering 50% waiver on processing fee and 100% waiver on foreclosure charges,“ the bank said.
These rates will be offered till September 10, 2016. The bank’s current MCLR (marginal cost based lending rate) for one year period is 9.60%.
Kotak Prime primarily formed to finance passenger vehicles and offers infrastructure and inventory funding to car dealers.
Sumit Bali, executive senior vice-president & head of personal assets at Kotak Mahindra Bank, said, “In addition to offering 6% pa interest rate on savings account on balance of above Rs 1 lakh, we have designed several loan offers for new and existing customers, for a limited period.
“Good monsoons always translate into positive news for the country’s economy. We want customers to prosper more, through our special deals on home, business and car loans, in addition to the higher interest rate on savings account,” he said.
The RBI has cut its key policy rates by 1.50 percentage points since January 2015. However, this has not fully transmitted into a cut in banks’ interest rates with a transmission of 0.50-0.60%. Bankers are waiting for better credit demand, burdened under the stress of bad loans and weak economy.
Time and again RBI governor Raghuram Rajan has pushed banks to cut interest rates on loans.
Interest rates on small savings schemes such as postal savings, term and recurring deposits, National Savings Certificate (NSC), etc saw deep rate cuts recently, and further cuts are on the anvil, Kotak said. Bankers had also cited higher deposit rates on small savings schemes as one of the reasons for keeping lending rates high.