One more chance to avail cheaper car, home loans

The loan market is a paradox of sorts. In the midst of speculation that interest rates are poised to move Northwards, the Punjab National Bank (PNB) today strung a surprise on customers by offering cheaper home and car loans till the year-end.

The economic slowdown has adversely impacted non-food credit growth, which is probably what went into PNB's decision to roll out the cheaper loans which it has been offering since the festival season.

The ideas is to give the customers one more chance as the next review of the Credit Policy by the Reserve Bank of India (RBI) may end up, sending interest rates in the opposite direction, that is upwards.

RBI Governor D Subbarao gave a taste of what is coming by raising the statutory liquidity ratio by one percentage point, the peak crisis level.

He was perhaps signalling the end of the easy policy money.

Whether the customers understood the underline meaning of the RBI's monetary stance, the policy maker of the country's second largest bank have understood the nuances of such a scheme.

They are doing a bit for the customers, but a great deal for themselves as bankers are worried that a high interest regime may bring a further shrinkage of credit growth.

The 'Festival Bonanza Offer-2009' entails housing loans up to Rs 30 lakh at a discounted interest rate of 8.50 per cent per annum for the first three years and 2 to 2.50 per cent below BPLR in the subsequent years of loan tenure under floating option.

Besides, PNB also offers complete waiver of processing fee and documentation charges on housing loans up to Rs 30 lakh. Margin on housing loans up to Rs 20 lakh has also been slashed to 15 per cent, the bank said in statement. The bank has also reduced the interest rate on car loans by 50 basis points, besides permitting relaxation in processing fee and documentation charges, it added.

-- (UNI) -- 05DC7.xml

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