Bank of Baroda cuts loan rates by 0.25 pc on select products of car, mortgage loans

Mumbai, Aug 28 (PTI) State-run Bank of Baroda on Thursday announced a rate cut of over 0.25 per cent in select products of car and mortgage loans with immediate effect.

The rate cut comes at a time when calls are being made to look at boosting credit growth, which will help in the economic expansion. With an eye on inflation, the Reserve Bank of India (RBI) has been holding on to rates and the money markets have also seen hardening of yields.

The move was aligned with the onset of the festive season, Bank of Baroda said in a statement.

In the home loan market, some major banks have been complaining about lending happening at "irrational" rates by rivals which is forcing them to slow down book expansion.

Bank of Baroda's executive director Sanjay Mudaliar said its mortgage offering has become more competitive now with the interest rate cuts.

As part of the move, the bank said the floating car loan interest rate now starts at 8.15 per cent, as against 8.40 per cent earlier.

The competitive car loan offering can be availed in case of new car buying and the rate of lending depends on the credit profile of the borrower, the bank said.

The Bank has also reduced interest rates on loan against property to 9.15 per cent from 9.85 earlier, the statement said. It offers a fixed rate interest car loan linked to the 6-month marginal cost of funding based lending rate starting from 8.65 per cent per annum, the statement said. PTI AA DRR