The country's largest lender, State Bank of India (SBI) cut interest rate on home loans to 9.90 per cent, while dropping it further to 9.85 per cent for women borrowers.
The cut comes close on the heels of a drop in interest rates by housing finance mortgage company, HDFC. There is now a possibility of interest rates on home loans being cut by various other banks, which is good news for home loan borrowers.
In the credit policy earlier this month, the Reserve Bank of India (RBI) did not cut interest rates, but had asked banks to look at the possibility of passing on previous cuts in the repo rates to customers.
Banks have been reluctant to cut interest rates, especially as most of the PSU banks are saddled with huge amount of bad debts.