Banks launched offer to attract customers, boost credit growth

With the onset of the festive season, multiple public sector and private sector lenders have rolled out new offers and discounts to attract customers at a time when interest rates are rising in the financial system. These offers are aimed at helping banks to boost their credit growth. Bank credit grew at 16.4 per cent to ₹126.3 lakh crore in the fortnight ended September 23, 2022. 
 
Banks such as State Bank of India, HDFC Bank, ICICI Bank, Punjab National Banks are offering discounted interest rates and have waived off processing fees on home and car loans. Some lenders are also offering discounts and cash backs on shopping using internet banking, mobile banking, credit and debit cards. 
 
This comes at a time when the equated monthly installments (EMIs) have been on an upward climb with the Reserve Bank of India (RBI) resorting to a series of rate hikes to rein in inflation. The repo rate, the rate at which the RBI lends money to banks to meet their short term funding needs, has been hiked by 190 basis points since May this year.
 
The country’s largest lender State Bank of India is offering concessions of up to 0.25 per cent on home loans, 0.15 per cent on top up loans, and 0.30 per cent on loans against property. The bank said the interest rate for buyers of new home loans as well as takeovers will now start at 8.4 per cent and top-up loans for furnishings, renovation or home makeover will begin from 8.8 per cent. Besides, the lender has waived off processing fees on home loans up to January 31, 2023.