Mumbai: ICICI Bank, the country's largest private sector lender, on Friday announced a 0.50 per cent hike in interest rates on housing loans on both fixed and floating segments with effect from May 8, while keeping other retail lending rates unchanged.
As a result of the hike, new customers would have to shell out 9 per cent for floating rate and 10.25 per cent for fixed rate home loans.
For existing floating rate customers, the increase in Floating Reference Rate (FRR) by 0.50 per cent will come into effect from July 1, 2006, in line with the bank's policy of resetting rates on quarterly basis.
Besides, existing fixed rate home loan customers will not be affected by the increase and their contracted rates will remain unchanged, the bank said in a statement.
The rate hike comes after several PSU banks, including State Bank of India and Punjab National Bank, raised home loan rates following the Reserve Bank increasing risk provisioning for these loans above Rs 20 lakh.
Besides, the banks also increased their benchmark prime lending rates.
When asked about an increase in PLR or interest rates on other retail loans, ICICI Bank Deputy Managing Director Chanda Kochhar told reporters that the current hike was sufficient as of now. "As of now, there are no plans to raise other rates," she said.
On the concerns expressed by the Reserve Bank of India (RBI) on credit quality, Kochhar said the bank has a proper risk mitigation practice in place.
"We have all processes to take care of risks like legal aspects, fraud control unit and there are enough checks."
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