A healthy move to boost the demand
San Francisco, CA -- (SBWIRE) -- 09/11/2012 -- In a bid to boost the demand, India’s leading banks in public sector have cut their interest rates up to 0.5 percent on auto and home loans.
Mr. P. Chidambaram, the Finance Minister of India, called for a decrease in the interest rates on home and auto loans by the public sector or state-run banks. Now these banks are hleping people by taking 0.25 percent less interest as compared to the private sector banks in India.
Indian Overseas Bank, Punjab National Bank (PNB), State Bank of India, Union Bank of India (UBI), Syndicate Bank and all other public sector banks have decreased their loans up to 0.25 percent, a move which is expected to boost the demand throughout the country.
The ministry of finance issued a notification to all public sector banks in India to cut the interest rates considering that the Reserve Bank of India reduced one percent statutory liquidity ratio.
With this move, a huge sum of Rs. 55,000 crore has been released into the public sector banking system in India.
On Monday, Punjab National Bank reduced its interest up to 0.5 percent for the housing and auto loans.
Now home loans will be available with a 0.25 percent less interest rate while the interest on car loans will be 0.5 percent less as compared to previous interest rates of this bank.
Chairman of United Bank of India, Mr. Debabrata Sarkar, said according to indiatoday.intoday.in, “Since the festival season is in the offing, we have reduced the rates. We have compromised with the mark-up over our base rate. We will try to compensate through the volume increase.”
The Central Bank of India has also trimmed its interest on loans for different purposes.
UBI is set to start its new policy on seven-year auto loans to 10.95 percent and they also announced home loans’ interest cut down to 10.25 percent.
This new move is aimed to increase the demand and according to the experts, the ultimate targets are likely to be achieved this way.
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