RBI impact: Home, car loans costlier

FOLLOWING TUESDAY'S 25-basis-points hike in short-term rates by the Reserve Bank of India, home loans and consumers loans, like auto loans, are expected to become costlier by 50 basis points soon.

FOLLOWING TUESDAY'S 25-basis-points hike in short-term rates by the Reserve Bank of India, home loans and consumers loans, like auto loans, are expected to become costlier by 50 basis points soon.

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Bankers had been waiting for the RBI's policy announcement. "The cost of funds is clearly under pressure; we were waiting for the RBI decisions," said a leading banker.

Sources said HDFC was set to increase home-loan rates by 50 basis points (to 9.5 per cent for floating-rate loans and 10.5 per cent for fixed-rate loans).

But ICICI Bank is not going to increase the rate immediately. Its executive director Chanda Kochar said: "We'll evaluate the liquidity scenario and cost of funds, and take a final decision in case our margins aren't protected." Currently, it was not the case, she said.

ICICI Bank had increased home-loan rates by 50 basis points last month.