Mumbai, Mar 4: The Reserve Bank of India's move to suck out excess liquidity from the system has forced country's leading private leaders such as ICICI Bank and HDFC Bank to raise lending rates for auto loans apart from discontinuing special home loan schemes.
On Thursday, Mar 4, ICICI and HDFC announced the hike in auto loan rates and the withdrawal of their special home loan schemes without citing the reason behind the decision.
Experts believe that the banks' move comes in response to RBI's last monetary policy review, wherein central bank hiked the cash reserve ratio or the amount banks have to keep with RBI for zero interest by 0.75 per cent to 5.75 per cent.
ICICI hiked the auto loan rate by up to 0.5 per cent along with announcing the withdrawal of its 8.25 per cent special home loan scheme.
“Auto loans rates have been raised by 0.25-0.50pc depending on segment and tenor with effect from March 5," an ICICI Bank spokesperson said.
On the other hand, HDFC Bank hiked auto loan rate by up to 100 basis points.
Besides this, Kotak Mahindra Bank and its car-loan financing arm also announced hikes in home and car-loan rates.