State-owned Punjab National Bank (PNB) on Monday slashed interest rates on home loan and car loans by up to 0.5%.
In the housing loan segment, rate has been reduced by 0.25% while interest rate on car loans has been slashed by 0.5% effective on Monday.
The decision to lower rate comes within days of finance minister P Chidambaram asking PSU banks to cut interest rates with a view to boosting sales of consumer goods and promoting growth.
The mhad cited the example of SBI on how EMI reduction boosted the sales of cars.
Home loans of up to Rs. 75 lakh would now attract an interest rate of 10.50% or the base rate.
Earlier, the interest rate was base rate plus 0.25% amounting to 10.75%, PNB said in a statement.
Similarly, rate has been reduced for home loans above Rs 75 lakh to 10.75% from 11% earlier.
With regard to car loans, three-year loans would now be available at 11.50% against 12%, down by 0.5%.
Car loans above 3 years would also attract 0.5% lower rate at 12% compared to 12.50% earlier, it said.
In August, another public sector lender Central Bank of India had announced it will cut interest rates on housing and other loans by up to 0.5% from September 1.
Last week, Corporation Bank slash interest rates on home, car and educational loans for a limited period of three-month.
The bank also decided to waive the processing fee for these loans.
Interest rates for Corp Home Housing loan for up to Rs 50 lakh is 10.50%. The new rates is 10.75% for loans up to Rs 1 crore and 11% for loans exceeding Rs 1 crore.
The bank was earlier charging 11.25% interest on home loans.