ICICI, HDFC Bank discontinue special home loan scheme

Home loan and auto loan rates are set to get expensive for new borrowers, reports CNBC-TV'18s Vidhi Godiawala. ICICI Bank and HDFC have discontinued their special home loan scheme and ICICI Bank and Kotak Mahindra Bank have hiked their auto loan rates by 50 basis points starting tomorrow.

Banks have not hiked their prime lending rate just yet. The higher rates as of now are for new borrowers.

ICICI Bank has raised auto loan rack rates by 25-50 bps starting tomorrow. The rates hiked depend on the segment and tenor of auto loans. India's largest private sector bank will discontinue its 8.25% home loan scheme from March 1. HDFC too has discontinued its 8.25% home loan offer.

Similarly, Kotak Mahindra Bank has hiked interest rates on home loans by 50 bps while Kotak Mahindra Prime has raised auto loans rates by 50 bps from tomorrow.

While ICICI Bank had declined to comment, a Kotak Mahindra Bank spokesperson said: "Rate revisions occur due to changing market conditions. The hikes are in light of the current macroeconomic, monetary, and anticipated liquidity conditions"

Kotak Mahindra Bank's prime spokesperson was quoted as saying: "Lending rates reflect the increase in borrowing cost observed over the last 6-8 weeks. While we had absorbed the increase in cost for the month of February, it now needs to be passed on.

Meanwhile, Bank of India told NewsWire18 that it has no plans to extend the special home loan scheme, which lapsed on February-end. The bank is also not looking to hike retail loan rates as of now.

In an interview with CNBC-TV18, Kamlesh Rao, Exec VP - Personal Finance & Mortgages, Kotak Mahindra Bank spoke about the increase in the loan rates.

Here is a verbatim transcript of the interview. Also watch the accompanying video.

Q: By how much have you increased your rates in your home and auto loans portfolio?

A: The home loans portfolio is up by 25-50 basis points and the auto loans portfolio is up by 50-75 basis points.