Bankers see no need for rate increase

Bankers see no immediate need for any interest rate hike, with most banks offering home loans at around 7.75-8 per cent.

"Private players may have raised rates because their margins were being squeezed. We do not feel any need to hike rates," said Bank of Baroda chairman Anil Khandelwal.

Housing Development Finance Corporation (HDFC) and ICICI Bank raised home loan rates by 0.50 per cent last week, and were rapped by the Union finance minister who felt that there was no need to hike rates.

"Net interest margin of banks are not really squeezed. Right now the interest rate movement is uncertain with inflation being down though oil prices are still up," said M V Nair, chairman & managing director, Dena Bank. The bank sees no urgency of raising interest rates at this point in time.

Home loan rates of aggressive private players have now come on par with the rest of the industry, with the cheapest floating home loan rate now at 7.75 per cent.

"If rates go up then there may be a need to revise rates. However, as of today, we see no need for any rate hike, as we are offering home loans at 8 per cent," said M Venugopalan, chairman & CEO, The Federal Bank.