Home loan rates: SBI, ICICI to decide tomorrow

India's second largest PSU lender Punjab National Bank has clearly said that it has no plans to raise home loan rates.

With retail loan rates hardening, people are anxiously watching the moves of country's top two lenders, State Bank of India and ICICI Bank, who are likely to announce their stance on home loan rate hike on Monday.

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"We will reveal it on Monday," quipped a top ICICI Bank official when asked about the bank's decision on hiking interest rate on home and other retail loans.

Reacting to increase in home loan rates by HDFC, IDBI and LIC Housing Finance by 0.25-0.50 per cent, the bank had hinted that it would decide by the week-end on raising home loan rates after watching the impact on cost of funds.

India's largest lender, SBI had a meeting on Saturday to review the home loan rates.

SBI chairman A K Purwar had said that the bank was reviewing the home loan rates as short-term interest rates are under upward pressure.

HDFC and LIC Housing Finance Limited had hiked home loan rates by 0.5 per cent while IDBI Bank increased retail lending rates by 0.25 per cent last week.

The pressure on banks to increase lending rates is rising due to increase in cost of funds, as deposit rates are moving up, besides the recent increase in short term rates (repo and reverse repo) by Reserve Bank of India.

India's second largest PSU lender Punjab National Bank has clearly said that it has no plans to raise home loan rates while other PSU lenders like Uco Bank and Oriental Bank of Commerce are undecided or rather would watch the steps of big brother SBI.