Banks rule out hike in home loan rates

Major banks, including the State Bank of India, ICICI Bank, Canara Bank, Punjab National Bank and Central Bank ruled out any hike in home loan and lending rates in the short-term.

The bankers cited excess liquidity to the tune of Rs 40,000 crore in the financial system as one of the reasons for not hiking lending rate.

SBI Chairman AK Purwar said the bank had raised only fixed home loan rate recently and there was no plan to revive either the fixed rate or floating rate in near future.

"The fixed rate was hiked because there was a tendency among borrowers to convert the fixed rate home loan to floating rate," he said, adding there will be no further rate hike in the short-term. Purwar also ruled out a hike in the prime lending rate (PLR) in the near future.

ICICI CEO KV Kamath said, "there is no chance of hiking home loan rate. Our costs of fund are low and so there is no reason to hike the rate."

Kamath also ruled out hike in the PLR, despite expecting a surge in demand for credit in the coming months.

Punjab National Bank Chairman SS Kohli said there was no plan to hike the rates of home loans and prime lending rate. Central Bank Chairman Dalbir Singh also said there was no immediate plan to revise the rates as there was excess liquidity of Rs 30,000-40,000 crore in the system.

MS Kapur, chairman of Vijaya Bank, which is the trendsetter among banks in offering lower home loan rate, said his bank was not thinking of hiking the rate now.

Canara Bank Chairman RV Shastri, Indian Overseas Bank Chief SP Gupta and Corporation Bank CMD K Cherian Varghese also ruled out hiking home loan and PLR.