Interest rates on advances have been de-regulated by the Reserve Bank of India (RBI). The banks determined their actual lending rates on loans and advances with reference to their Base Rate and by including such other customer specific changes as considered appropriate. A statement is annexed.
As per the guidelines of RBI, Base Rate system has been introduced in the banks with effect from 01.07.2010 and all loans sanctioned/ disbursed on or after 01.07.2010 are linked to the Base Rate. Since Base Rate arrived at by banks is based on cost of funds and various other factors of respective banks, the Base Rate of individual banks varies. Since interest rates of housing loans are linked to the Base Rate, there is variation in interest rates offered by various banks.
This was stated by the Minister of State for Finance, Shri Namo Narian Meena in a written reply to a question in the Lok Sabha today.
DSM/RS/KA
Annexure
DIFFERENTIAL INTEREST RATES ON HOME LOANS” SHOWING RATE OF INTEREST (ROI) CHARGED BY PUBLIC SECTOR BANKS ON INDIVIDUAL HOME LOANS.
Sl. No | Name of the Bank | As on January 10, 2013 (In %) |
Minimum | Maximum |
1. | Allahabad Bank | 10.20 | 10.95* |
2. | Andhra Bank | 10.50 | 11.75 |
3. | Bank of Baroda | 10.75 | 12.25 |
4. | Bank of India | 10.50 | 10.75 |
5. | Bank of Maharashtra | 10.50 | 12.25 |
6. | Central Bank of India | 10.25 | 10.50 |
7. | Corporation Bank | 10.50 | 11.00 |
8. | Canara Bank | 10.50 | 10.75 |
9. | Dena Bank | 10.45 | 11.75 |
10. | Indian Bank | 10.50 | 12.00 |
11. | Oriental Bank of Commerce | 10.40 | 11.00 |
12. | Punjab National Bank | 10.50 | 11.25 |
13. | State Bank of India | 10.00 | 10.15 |
14. | Vijaya Bank | 10.25 | 11.25* |
15. | Union Bank of India | 10.50 | 13.25* |
16. | IDBI | 10.25 | 11.50* |
17. | Indian Overseas Bank | 10.25 | 11.25* |
18. | Punjab and Sindh Bank | 10.50 | 11.00 |
19. | State Bank of Bikaner & Jaipur | 10.40 | 10.50 |
20. | State Bank of Hyderabad | 10.25 | 10.25 |
21. | State Bank of Mysore | 11.00 | 12.00 |
22. | State Bank of Patiala | 10.50 | 12.75 |
23. | State Bank of Travancore | 10.25 | 10.50 |
24. | Syndicate Bank | 10.50 | 12.00 |
25. | UCO Bank | 10.20 | 10.20* |
26 | United Bank of India | 10.70 | 11.00 |
* as on 19.02.2013.
DSM/RS/ka
(Release ID :92448)
Base Rate system causes variation in home loan interest rates across banks due to deregulation of lending rates. The RBI deregulated lending rates and introduced the Base Rate framework effective 1 July 2010; banks set lending rates by reference to their Base Rate plus customer specific adjustments, and because Base Rates differ across banks housing loan interest rates vary. A ministerial statement appended an annexure listing public sector banks' minimum and maximum home loan rates as of early 2013, demonstrating bank level variation under the Base Rate system.
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