Differential interest Rates on Home Loans

RBI de-regulated Home Loans interest rates to provide competitive environment in banking sector

Interest rates on advances have been de-regulated by the Reserve Bank of India (RBI). The banks determined their actual lending rates on loans and advances with reference to their Base Rate and by including such other customer specific changes as considered appropriate.  A statement is annexed.

As per the guidelines of RBI, Base Rate system has been introduced in the banks with effect from 01.07.2010 and all loans sanctioned/ disbursed on or after 01.07.2010 are linked to the Base Rate.   Since Base Rate arrived at by banks is based on cost of funds and various other factors of respective banks, the Base Rate of individual banks varies. Since interest rates of housing loans are linked to the Base Rate, there is variation in interest rates offered by various banks.

This was stated by the Minister of State for Finance, Shri Namo Narian Meena in a written reply to a question in the Lok Sabha recently



Name of the Bank As on January 10, 2013 (In %)
Minimum Maximum
Allahabad Bank 10.20 10.95*
Andhra Bank 10.50 11.75
Bank of Baroda 10.75 12.25
Bank of India 10.50 10.75
Bank of Maharashtra 10.50 12.25
Central Bank of India 10.25 10.50
Corporation Bank 10.50 11.00
Canara Bank 10.50 10.75
Dena Bank 10.45 11.75
Indian Bank 10.50 12.00
Oriental Bank of Commerce 10.40 11.00
Punjab National Bank 10.50 11.25
State Bank of India 10.00 10.15
Vijaya Bank 10.25 11.25*
Union Bank of India 10.50 13.25*
IDBI 10.25 11.50*
Indian Overseas Bank 10.25 11.25*
Punjab and Sindh Bank 10.50 11.00
State Bank of Bikaner & Jaipur 10.40 10.50
State Bank of Hyderabad 10.25 10.25
State Bank of Mysore 11.00 12.00
State Bank of Patiala 10.50 12.75
State Bank of Travancore 10.25 10.50
Syndicate Bank 10.50 12.00
UCO Bank 10.20 10.20*
United Bank of India 10.70 11.00

*AS ON 19.02.2013