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ICICI Bank cuts lending rates (FRR and I-BAR)
| A reducing interest rate scenario is not all bad news – it brings cheer to loan seekers and people who have already taken loans! |
Rate cut by ICICI Bank
ICICI Bank, which is India’s largest private bank, has announced a reduction in its lending rates. The floating rates have been lowered by 0.5%, and this change in interest rates would be effective from 5th June, 2009.
This rate cut follows the lending and deposit rate cuts announced in April 2009, and the deposit rate cut announced in May 2009.
Floating Reference Rate (FRR)
The Floating Reference Rate (FRR) applicable to retail loans has been reduced by 0.5%. The new FRR stands at 12.75% from the earlier 13.25%.
All new as well as existing floating rate loans (including home and auto loans), would benefit from this rate cut.
Benchmark Advance Rate (I-BAR)
ICICI Bank has also reduced the Benchmark Advance Rate (I-BAR) by 0.5%. The new I-BAR is 15.75%, compared to the earlier 16.25%.
Deposit Rates
There has been no reduction in the deposit rates applicable to the fixed deposits.
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Jun 15, 2009
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That is what has happened to my loan, When I started my loan in Nov 2006 the rate was 7.75% and it reached to a peak level of 12.5% and now it has reduced a bit to 11.75%.
I have a very simple question to the institute, when you are acquiring new customer at 8.5% (floating rate) how can you charge more amount to your existing customer.
Though the interest rate change has recently been announced to be effective from June, there are no changes on the EMI shown in the amortization schedule.
As a normal practice RBI should not allow charging differential or less interest rate to new customers. This is highly unethical on bank’s part. As the existing customer has already committed to the bank by taking a loan from the bank.
I think RBI should observe and investigate this matter. If not we should approach higher authorities for taking corrective action.
As my experience with a bank does help me understand the asset & liability imbalances from the bank’s perspective. I can see that bank is exploiting existing customers and taking the observer or regulator ( RBI) for a ride.
One of the experience
When approached the bank we are told that please pay 0.5%+ST of your outstanding balance to reduce it to 10.25% which is still 0.75% higher than the rate you are promising. May you please be kind to your loyal customers and stop us feeling cheated and actually incurring huge losses.