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ICICI hikes consumer loan rates by 1 pc

Mar 31, 2007 06:00 PM IST Business Business
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New Delhi: There is bad news for you if you were planning to take a home loan. ICICI bank, the country's largest home loan provider, has hiked its consumer loan rates by a full 1 per cent. CNN-IBN spoke to the Deputy Managing Director of ICICI bank, Chanda Kochhar about this decison of the bank. "As far as the retail consumer demand is concerned, we would definitely see the rate of growth going down . Last year we saw a growth rate of 30-35 per cent. This year we may see 20-25 per cent. But on the corporate side, it’s a healthy project pipeline and corporates are diversifying their sources of funds so I don’t see an impact on demand on that side. We have to watch how the inflation moves and PRR hikes and the interest rates on PRR and what impact the foreign currency movement has," she said. The hike comes after the Reserve Bank of India (RBI) hiked Cash Reserve Ratio (CRR) by 50 basis points, and the repo rates (the rate at which banks borrow from the Central Bank) to 7.75 per cent on Friday. ICICI has also increased the prime lending rate by a per cent. The hikes come into effect immediately. As a result, the Floating Interest Rate on your home loan has gone up from 10.75 per cent to 11.75 per cent and the PLR has gone up from 12.75 per cent to 13.75 per cent. However, the hike comes as a relief for people who rely on savings. Interest rates on fixed deposits and savings accounts are likely to go up. Banks are already offering rates 9.5-10 per cent interest on deposits above one year. Rates will soon touch 10-10.5 per cent for deposits up to three-years. (With inputs from moneycontrol.com )