Finally ICICI Bank exisiting home loan customers, some ray of hope... well is it?
Finally some respite for the ICICI bank exisitng home loan customers who were made to pay much higher intrest rate even when though the intrest rates have fallen in previous year.
In the past 1 year home loan rates have reduced from 12.5 percent per annum to 8 percent per annum. But private bank like ICICI bank did not reduce the floating interest rates for existing home loan customers who were still paying around 11 percent per annum. ICICI bank did not reduce its FRR (reference rate) to which floating interest of home loans are fixed. Instead it started offering new home loan at rate FRR - 4 percent where as existing home loan were typically at FRR - 1.5%. Hence this way by not reducing the floating rate for existing customers it started giving new home loan at less rate to new customers.
However the catch is if interest rates reduce further say by one percent, ICICI bank may well start giving new home loans at FRR – 5 %, there by one again not passing the lower rate to existing customer who after pay 1.15% service change will be stuck again at 8.5%. But if intrest rates raise ICICI will definitely increase FRR so that everybody has to pay increased rate. So if you are a new customer think whether to go for ICICI bank becase you will face same predicament in may be 2 years. For existing customers, well there is some respite.
True, icici is a money lender not a banker
Thats true, if you are going to take lon form private bank, make sure that the floating intrest rate is linked ot their one year fixed deposit intrest rate or to RBI repo rate. If they offer rate with respect to thier onw benckmark like PLR or FRR etc .. beware of it and better go with PSU bank
Isnt it open CHEATING by ICICI bank.... why dont customers complain to RBI and bring them to book.
thants true, one should not go to ICICI bank for home loans. Initially they offer less intrest rate loans but in 2-3 years you will realise that they have steadily increased intrest rate on your loan and offering much lesser rate to new customers. Hence better to go to SBI or other govt banks..
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