Private sector lender Kotak Mahindra Bank on Friday reduced its interest rate on home loans to 7 per cent, at par with market leader SBI's offering. The city-headquartered lender also announced a slew of other offers, including loan processing fees waivers and faster online approvals on retail and agricultural loan products, as part of the festive offers christened as 'Khushi Ka Season'.
It can be noted that credit growth is at a multi-year low of under 6 per cent despite a lot of efforts to push lending by the authorities in the high liquidity environment.
Analysts and bankers have been flagging concerns over stress developing in the otherwise resilient retail segment amid the reverses faced by the economy, which is set to contract by nearly 10 per cent in the current financial year.
"The Indian economy is steadily moving towards normalcy and we are seeing the early signs of the return of consumer confidence and demand," the bank's group president for consumer banking Shanti Ekambaram said.
The new scheme will be for a month and will address a customer's needs ranging from borrowing to shopping to payments to savings, she said.
The bank said home loans will be starting at 7 per cent per annum and that savings of up to Rs 20 lakh can accrue on balance transfer cases, wherein a customer of a rival lender switches to the bank.
The effective borrowing rate for loans under Rs 30 lakh for SBI is at 7 per cent with a 0.05 per cent concession for women borrowers, as per its website.
Kotak Mahindra Bank also announced halving of processing fees on car loans, two-wheeler loans, and borrowings for agri business, commercial vehicle and construction equipment finance, as per a statement.
Further, customers opening new savings bank accounts will get a voucher of Rs 250 which can be spent on Flipkart or Amazon, as per the statement.