PSU banking entity IDBI Bank has decided to reduce interest rates on home loans by 25 basis points and auto loans by 300 basis points for the ongoing festive season. The rate cut would be in effect for three months from October to December 2009. The move is seen as an attempt to ramp up its credit portfolio.
For home loans up to Rs 30 lakh, the interest rates would be reduced to 8.75% from the current level of 9%. It would be 9% for Rs 30-50 lakh under a new slab. Loans above Rs 50 lakh attract an interest rate of 9.25%.
The PSU lender has unveiled a new auto loan scheme for the festival season wherein it will charge 8.5% fixed rate for the first year. The bank has also put a cap of Rs 2,500 on the processing fee for vehicle loans.
The bank, which had discontinued its personal loan segment on account of rising delinquencies last year, has restarted the business but only for salaried employees. The bank will up to 16% interest on personal unsecured loans.
This apart, IDBI Bank has decided to offer 25 basis point higher interest rate on fixed deposits of six-month to one-year tenure for the next one month. The bank aims to increase its retail deposits base to Rs 67,000 crore by the end of March 2010 from the current base of Rs 50,000 crore.
The PSU bank plans to expand its branch network and staff-strength in the current year. IDBI Bank has a network of 602 branches and hopes to ramp it up to 1,000 by end-fiscal. It also plans to recruit around 7,000 more people this year, out of which 4,000 will be inducted in the personal banking group.