The Hindu Business Line : Union Bank cuts rate on home loans

Mumbai, May 7 Union Bank of India has cut the interest rate on home loans of over Rs 20-30 lakh by 50-100 basis points depending on the tenor of the loan, on loans sanctioned after May 9, 2008.

The bank is the first bank to cut the home loan rate after the Reserve Bank of India reduced the risk weight for capital adequacy purpose on housing loans up to Rs 30 lakh, against loans of up to Rs 20 lakh, in the Annual Monetary Policy, last month.

According to a senior official of Union Bank, about 90 per cent of the bank’s home loan portfolio comprises loans in the range of Rs 20-30 lakh.

Explaining the rationale behind the RBI move, Governor, Dr Y.V. Reddy, had said, “This has been done keeping in mind the number of people involved and the rise in prices of houses.”

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