ICICI loan rates at par with SBI''s : ICICI Bank MD

ICICI Bank stated that the effective rate offered by the public and private bank was the same as the SBI and claimed it was much faster in serving customers. However, on asked about SBI''s aggressive strategy of pricing home loans low, ICICI Bank said the current economic scenario does not warrant aggression whereas earlier this month, SBI launched a new home loan scheme offering loans at 8% for 1-5 years, depending on the amount, with zero processing fees, as against an average of about 10% charged by others.

Moreover, on whether SBI has a better sales pitch on this front, it said that on quarter on quarter you should look at the actual disbursement and if you compare private sector disbursement to the public sector bank, you would get the picture. Additionally, ICICI said that it would not like to talk about any particular bank and that home loan would be a major focus area for the organization.

HDFC slashed rates by 50 bps for Rs 30-50L slab

Housing Development Finance Corporation (HDFC) has slashed the interest rates by 50 basis points to 9 % for the Rs 30 lakh - Rs 50 lakh slab as against 9.5% earlier. The development comes within a week of SBI cutting rates by 50-75 bps for high-value loans and offering loans up to Rs 5 lakh at 8% fixed rate for five years.

Earlier, HDFC had three slabs of providing loans for home buyers. For loans upto Rs 15 lakh, it charged 8.75% per annum while it charged 9% for loans in the range of Rs 15 lakh to Rs 30 lakh and 9.5% for loans more than Rs 30 lakh. However, now HDFC has introduced a new slab of loans at 9% for Rs 15 lakh and Rs 50 lakh. After this rejig, only loans of over Rs 50 lakh, it charge an interest rate of 9.5%. Earlier even home buyers taking loan of above Rs 30 lakh were paying an interest rate of 9.5%.

Now, HDFC offers loans between Rs 30 lakh-Rs 50 lakh at 9%, as per the revised rates. The rates will be applicable only to new customers as the mortgage lender has not revised its prime lending rate.

PNB reduces home, car loan rates by 50 bps

Punjab National Bank slashed home and car loan rates by 50 basis points where the bank has launched ''PNB Festival Season Bonanza Offer 2009'' that offers attractive rates to people during the festival season. However, PNB''s campaign is said to come a week after SBI''s three-month-long home loan campaign, offering loans at 8%.

However, it is said that under the offer, housing loans up to Rs 30 lakh will be available at discounted rate of interest of 8.50% under fixed interest rate option across all repayment tenors, besides full waiver of processing fee and documentation charges whereas margin also stands reduced to 15% for housing loans up to Rs 20 lakh.

As for car loans, a rebate of 0.5% is offered to potential borrowers under fixed option and is said to be valid from tomorrow till October 31 while att present, the fixed rate of interest offered by bank is 9%.

RBI permits Co-op banks to lend housing loan to individuals

In order to provide enhanced housing loan to an individual borrower the Reserve Bank of India (RBI) has given permission to the State and Central Co-operative Banks where they can now give an individual borrower housing loan up to Rs.20 lakhs but for a bank having a net worth of Rs.100 crore and above, the housing loan limit per borrower will be Rs.30 lakhs.

Additionally, a State/Central Co-operative bank was allowed a maximum housing loan of Rs.5 lakhs per borrower, dependent on the condition that the aggregate housing loans outstanding on any day against individuals, institutions and societies should not exceed 5% its total deposits.

However, RBI also makes it clear that housing loans would not include finance to commercial real estate sector and that the apex bank had already advised State and Central Co-operative banks through a circular in May this year to cease from financing the commercial real estate sector.

Draft of direct tax code unveiled

In order to reduce the tax burden and streamline the over four decade old income tax, the government proposes radical tax reforms through a draft code. The 47-year-old direct tax law in India may soon be history. Unveiling the draft of a new direct tax code on Wednesday the Finance Minister said a bill could be passed in the winter session of parliament if reasonable level of discussion takes place on the code and this will become law in 2011.

As per the proposal, the tax rates on individuals are set to decline to 10 per cent for incomes up to Rs 10 lakh while 20 per cent for up to Rs 25 lakh and 30 per cent for above that. Moreover, the incentives on savings are also set to rise to Rs 3 lakh, even as securities transaction tax (STT) is scrapped, capital gains tax unified to one in the long and short term and wealth tax slashed to 0.25 per cent from one per cent with an increase in limit to Rs 50 crore.

The new draft code also has attempted to simplify the tax processes and increase transparency but also reduce the litigations.

The Corporate Tax could reduce to 25 per cent and now MAT will be charged on gross assets instead of book profits to plug gaps. Besides this, the business losses can be carried forward indefinitely and there shall be no tax deduction on interest payable to banks.

IDBI Bank lowers interest rates on deposit, auto loans

IDBI Bank has slashed the interest rates on deposits in the range of 25 basis points to 50 basis points across various maturities effective August 12. Along with this, the bank has also announced reduction of one percentage point in lending rates for automobile loans. The bank has not made any changes in rates for deposits up to six months and all changes are for duration beyond six months.

The interest rate for deposit of one year to two year will be 6.75 per cent as against 7.25 per cent currently. The highest rate of 8 per cent is for deposits with tenure of seven to 10 years. Besides this, the bank said it has reviewed its lending rate on auto loans and reduced by one percentage point. The revised fixed rate of interest for a three-year tenor would vary from 10.50 per cent -12 per cent and for five years between 10.75 per cent and 13 per cent.

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