A day after Reserve Bank of India (RBI) decided to cut repo rate by 25 basis points (bps) and cash reserve ratio (CRR) by 25 bps, HDFC Bank second biggest private lender today cut the interest rates in auto segment.
According to a senior bank official interest rates on car loans and commercial vehicles (CV) are now cheaper by 25 bps while interest on two wheeler loans have been brought down by 50 basis points.
Interest on car loans now stands in the range of 10.5-11.5% while loans for heavy commercial vehicles are now priced at 11% while for light commercial vehicles loans borrower will have to pay the interest of 13.75%.
Those taking loans for two wheelers will have to pay the interest between 19.25-22.25% according to the bank official.
However base rate has been left untouched for now, he added. New rates are effective from Febuary 1.
The rate cut in selected brackets help only new borrowers while a cut in the base rate helps entire spectrum of borrowers therefore only new borrowers with HDFC Bank would be benefitted by this move. Existing borrowers will continue with the applicable interest unless the bank cuts base rate which is 9.7% currently. Bank had cut the base rate by 10 basis points in December.
Yesterday public sector lender IDBI Bank had cut its base rate by 25 basis points to 10.25% and also dropped deposit rates by similar margin in some buckets.
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