Housing and corporate loans set to become cheaper as banks reduce lending rate by upto 1.48%

Housing, auto and corporate loans are all set to become cheaper with half a dozen PSU and private banks steeply reducing benchmark lending rate by up to 1.48 per cent after spurt in deposits following demonetisation.Taking a cue from SBI, other banks including largest private sector lender ICICI Bank and state-owned Oriental Bank of Commerce and Andhra Bank announced cut in marginal cost of funds based lending rate



yesterday.

SBI along with PNB and Union Bank of India, yesterday reduced the lending rate by a good 0.9 per cent after Prime Minister Narendra Modi in his new year eve address urged the banks to focus on the needs of poor and lower middle class and middle class.

The reduction in lending rates may prompt increase in credit off take which has moderated substantially putting burden on balance sheet of banks.