Leading private sector giant Axis Bank has announced a cut in home loan rates by up to 0.30%. As per the new announcement, which is already effective from the 16th of May, 2017, the home loan rates under Rs. 30 lakhs are 8.35%.
This announcement was made just after SBI slashed its rates by up to 0.25% for loans under Rs.30 lakhs. Other major banks including HDFC and ICICI Bank have also followed in the footsteps of these two banks, getting their rate offerings similar to SBI where the lowest home loan rate stands at 8.35% in case of women borrowers.
Axis Bank has not announced any gender-specific home loan rate. This means that all home loan borrowers will get home loans under Rs.30 lakhs at 8.35%. Women in most other banks have an extra incentive of 0.05%. According to the executive director at Axis Bank, Rajiv Anand, there is a huge and genuine requirement for affordable housing in the country, which is not catered to largely. These rate cuts will help more people fulfill their dreams of owning their own houses according to him.
Axis Bank has witnessed steady credit growth driven by retail amidst slumping demand in the corporate side of things. With the retail segment, home loans has been showing continual growth. Credit growth for the bank’s system stood at 5% in FY17, a multi-decade low figure. The huge increase in deposits after the demonetization drive resulted in a severe liquidity crunch for the public and an excess of liquidity for banks.
Banks were left in a tough position where they had to tackle huge liquidity without having the means to deploy the same effectively. Loans for the affordable housing segment are set to go up with these rate cuts and these also qualify as priority sector lending initiatives. These loans will also help all banks meet their mandatory requirements.