The Hindu Business Line : Banks vying to cash in on festive season

Loan melas
Rates cut up to 25-50 basis points on loans till Oct. 31.
Savvy customers can save up to 2 per cent on the interest rates.
Some banks waive processing charges for housing loans.

Mumbai , Sept. 22

Banks have started offering retail loans at lower interest rates to cash in on the festive season demand. Some banks have already announced cut in rates by 25-50 basis points on retail loans availed till October 31.

According to bankers, during the festive period beginning August end till October or November, demand for retail loans such as housing, auto and personal loans increases by about 20-25 per cent.

The festival season, which starts with Ganesh Chaturthi and extends into Navratri and Diwali, stretches over two to three months. Many banks also use this period as an opportunity to increase visibility and awareness about their retail products.

Savvy customers can save up to 2 per cent on the interest rates on loans during this period, said a bank official.

Central Bank of India has reduced interest rates on home loans, loans to students, teachers, traders, for consumers durables, vehicles and tours, by 50 basis points from September 15 to October 31. The bank has also waived processing charges on its housing loan.

State Bank of India has reduced rates on home loans and auto loans by 50 basis points from August 27 to October 31 during the `SBI Loan Utsav'.

The processing fee on home loans also has been reduced by 50 per cent.

An official from SBI said: "Apart from the festival related demand, we also see demand for housing loans from customers who wish to avail themselves of tax benefit for the full year before October 1."

Punjab National Bank has reduced the rate on home loan by 25 basis points from September 23 to December 31 to take advantage of the increased demand during the festive period, said an official.

Though HDFC Bank has not reduced rates on its products, it is offering easier repayment terms, and discounts from manufacturers for its regular customers during this period.

For instance, in case of a vehicle loan, a customer can get up to 90-95 per cent funding during the festive period, against the normal 80 per cent.

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