I am sure, I have read this headline in the newspapers at least six times in the last 6 months. Sadly, I don’t see it reflecting in the status quo. We are still paying @13% interest for our home loan taken from ABN AMRO. Some other banks have lowered their rates to the existing customers to the 11% to 12% rates bracket but not our bank.
The RBI has been reducing the repo rate continuously since the last 6 months from 9% to 5% to infuse some liquidity into the economy. Repo rate is the rate at which the RBI lends short-term funds to the banks. The banks are not reducing their PLRs (Prime Lending rates) to which the floating rates are pegged. They, however; offer lower rates to new home loans which doesn’t help the financial situation of people like us who are locked into the so-called floating rates which saw their way upwards very promptly but refuse to even show a little inclination downwards.
My suggestion to all is please take it up with your individual banks and pressure them to lower the rates or else one could consider switching to SBI loans which is offering it at around 8.5% but do take into consideration the switching costs, pre-payment charges, processing fees etc.
Last option, lodge a complaint with RBI.
If the banks don’t lower their rates along with the repo-rate, then I wonder why they offer floating rates in the first place?!
I know, this is so unscrupulous. I am serious about lodging a complaint this time. They are just taking us for a ride.