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ICICI denies hiking home loan rates

The country's second-largest lender clarifies that it has not raised home loan rates from August 1, as reported.

india Updated: Aug 18, 2006 19:17 IST

The country's second-largest lender ICICI Bank on Wednesday clarified that it had not raised home loan rates from August 1 and would take a view only if cost of funds goes up.

"In the long term, interest rates will depend on cost of funds," ICICI Bank's retail head V Vaidyanathan told PTI, when asked if the Bank plans to raise home loan rates.

If cost of funds go up, interest rates go up, he said.

"There has been no decision to hike home loan rates," Vaidyanathan said, referring to reports that ICICI Bank has raised home loan rates by 0.25 per cent from August 1.

The Bank said that the floating interest rate on home loans is 9.5 per cent and 11 per cent for fixed option with maturity up to 20 years.

The bank had raised the Floating Reference Rate and Prime Lending Rate (PLR) by 0.5 per cent each to 10.25 per cent and 12.25 per cent respectively, effective from July 1.

In the first week of August, Oriental Bank of Commerce and Punjab National Bank raised home loan rates by 0.25-1.0 per cent while State Bank of India and Bank of Baroda hiked the PLR by 0.25-0.50 per cent.

Most of the PSU banks had indicated to raise lending rates after Reserve Bank raised short-term rates by 0.25 per cent each in June and July.

Many private banks like ICICI Bank hiked loan rates after RBI's June rate hike, but the PSU banks had adopted a wait and watch policy.

First Published: Aug 09, 2006 17:48 IST