India's largest private lender ICICI bank announced on Monday it will offer loans of up to Rs 15 lakh at base rate -- the minimum lending rate -- in rural areas.
The bank has linked up the rate of rural home loans to the base rate, which currently stands at 9.70%. Its larger rival SBI provides home loan to women borrowers at base rate at a similar pricing level.
"ICICI Bank is committed to supporting the socio-economic development of a larger section of society," Executive Director Rajiv Sabharwal said in a statement.
ICICI Bank said rural loans will be available in 189 of its 4,052 branches.
The ticket size under the product christened 'ICICI Bank Saral-Rural Housing Loan' is between Rs 5 lakh and 15 lakh and the tenure is 3-20 years, it said.
The rate of interest will be floating, which means it will be revised with the movement in the base rate across the loan tenure. Rural borrowers can avail of the loan to purchase or construct or renovate a home, it added.
It can be noted that loans of up to Rs 20 lakh in rural areas qualify as priority sector lending wherein banks have to mandatorily lend 40% of their annual fresh advances to the disadvantaged. If there is a shortfall, the amount gets invested in low-yield rural infrastructure development fund.