On the first anniversary of demonetisation, Bank of Baroda, the third largest public sector bank in India, announced it is offering an interest rate of 8.30 percent on home loans.
Bank of Baroda’s 1-year MCLR or the marginal cost of funds based lending rate currently stands at 8.30 percent (revised in October). This rate is applicable irrespective of the total home loan amount and is available for a tenure of up to 30 years for all categories i.e. salaried / self-employed, the bank said in a statement.
It further added, "The lowest rate of interest currently offered by the other public sector banks, is applicable only to a small category of customers, such as the salaried woman seeking a loan of less than Rs 30 lakh. However, a male entrepreneur with pristine credit rating seeking a home loan of more than Rs 75 lakh may end up paying a rate of interest of 8.50 percent and above at other banks."
Other lenders including HDFC Ltd, ICICI Bank, Axis Bank and LIC Housing Finance, among others, are offering home loans at 8.35 percent.
Last week, SBI, country's largest bank, had announced its reduced rates to home loan and auto loan borrowers with rates of 8.30 percent and 8.70 percent. SBI reduced its 1-year MCLR by 5 basis points (0.05 percentage points) to 8.00 percent.
MCLR is the minimum rate below which banks can't lend to customers. The bank went ahead with the MCLR cut after a gap of 10 months.
This was cut after 10 months with its previous reduction on January 1, 2017 after it was flush with deposits post demonetisation.
Bank of Baroda said it does not add any mark-up on its MCLR for its best rated home loan borrowers.
"Bank of Baroda started offering home loans at one year MCLR from January 7, 2017," the bank said.
Ashok Kumar Garg, Executive Director, Bank of Baroda said, "Bank of Baroda is a customer-centric bank, most competitive in the industry. The bank decided to offer home loans at one year MCLR for its best-rated customers. With the new digital experience and quick turn-around time, we aim to become the most agile bank in retail loan category."