Banks extend Discount offers on home and car loans till Feb 2012
Festive offers on loans are continue for the next couple of months. PSU banks offering housing and auto loans at discounted rates under their festival campaigns that began in September, have decided to extend the discounts beyond December 31.
While RBI data shows credit demand has been poor despite these offers, bankers hope the demand would pick up in the last quarter of the financial year. Credit growth during the April-December period was 8.2 %, against RBI’s projection of 18 % credit growth in 2011-12.
Indian Overseas Bank extends the festive offers till February 28 to encourage retail customers to go for car and housing loan. IOB also offers 0.50 % concession on lending rates and 50 % concession on processing charges.
IDBI Bank had remove processing charges and fees almost a year ago to strengthen its grip on retail assets. IDBI offers 1% discount on car loan and a .5% on home loans since October 1. These offers continue this offer for one or two more months.
In November, the outstanding amount in home loans rose 7.6 %, compared with 8.8 % a year ago, while car loans grew 9.5 %, compared with 15.5 % in the year-ago period, according to RBI data.
Bank of India also offers 50% concession on processing charges on retail loans. Bank of Baroda would run its festive offer on housing and car loans for one more month.
Overall credit growth stood at 17 % as on December 16, compared with 24 % a year ago. High lending rates and high inflation have impacted growth in the retail segment this year. RBI had raised policy rates by 375 basis points in a span of 19 months since March 2010. Banks responded by raising lending rates by around 250 basis points in the same period.
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