In a clear indication of an increasing interest rate scenario, India’s biggest private sector bank, ICICI Bank said it has increased its car loan rates by up to 0.5% and removed its special home loan scheme offering loans at 8.25%.
An ICICI Bank spokesperson said, “Auto loans rack rates have been raised by 0.25-0.5 per cent depending on segment and tenor with effect from March 5″.
While the bank officials did not give any reason for this move, industry sources say that the rate hike was mainly prompted by signs indicated by the RBI in its previous monetary review policy.
In order to flush out extra liquidity from the system, the apex bank increased the cash reserve ratio (CRR) by 0.75% to 5.75%. With this step, RBI has removed Rs 36,00-crore from the system.
After this rate hike, auto loans will now have an interest rate of 9.75-11%
ICICI Bank also removed its special home-loan scheme, in which it gave home-loans for 8.25% at fixed rate for 2 years, operative from March 1, the spokesperson said further.
Currently, ICICI Bank is giving home loans at 8.75% for amounts up to Rs. 30 lakhs. For sums between Rs 30-lakh to Rs 50-lakh, the rate is 9% and those exceeding Rs 50-lakh, at 9.50 %.
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