Axis Bank, the country's third largest private sector bank, has cut home loan interest rates by 30 basis points for loans up to Rs 30 lakh.
This is expected to benefit both salaried and self-employed people and provide a fillip to affordable housing in the country.
Commenting on the decision, Rajiv Anand, Executive Director,
Axis Bank has been at the forefront of fostering an ecosystem for credit delivery to this segment, he said.
Salaried individuals can now avail home loans up to Rs 30 lakhs at a revised interest rate of 8.35 percent (MCLR + 20 basis points) as against an interest rate of 8.65 percent (MCLR + 50 basis points earlier).
For Self-employed, home loan rates has been reduced to 8.40 percent (MCLR + 25 basis points) as against 8.70 percent (MCLR + 55 basis points).
Anand told BusinessLine that the latest Axis Bank move was prompted by the need to remain competitive and also due to the fact of improved "affordability" (cost of funds coming down for the bank). He also admitted that the 30 basis points cut could have some impact on margins for the bank in this segment.
"We never wanted to be the cheapest provider (of home loans).We don't want to compete on price, but would do so on transparency and service standards", Anand said.
He said that Axis Bank wants to grow faster than the market as regards Affordable Housing. "There are ample opportunities for banks like us to grow in the affordable housing segment. Already, Government has come up with a package of measures to give a boost to Affordable housing", he said.
Axis Bank's home loan book size is about Rs 74,000 crore, which is 44 percent of the retail advances book.
It may be recalled that State Bank of India and ICICI Bank had recently cut their respective home loan rates to give a push to affordable housing segment.