ICICI Bank ups auto loan rates by upto 0.5 per cent

MUMBAI: In a clear signal of a rising interest rate regime, country's largest private sector lender, ICICI Bank, today said it has hiked its auto loan rates by up to 0.5 per cent and withdrawn its 8.25 per cent special home-loan scheme.

"Auto loans rack rates have been raised by 0.25-0.5 per cent depending on segment and tenor with effect from March 5," an ICICI Bank spokesperson said.

Though the bank did not give any reason for the rate hike, industry experts said that the rate increase was largely prompted by signals communicated by the Reserve Bank in its last monetary policy review.

With a view to suck out excess liquidity from the system, the RBI 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, absorbing Rs 36,00-crore from the system.

Following the hike, interest rates for new auto loans will now be in the range of 9.75-11 per cent.

ICICI Bank also withdrew its special home-loan scheme, under which it offered home-loans for 8.25 per cent fixed rate for two years, effective from March 1, the spokesperson added.

On home-loans, ICICI bank is currently offering home-loans for up to Rs 30-lakh at 8.75 per cent, loans between Rs 30-lakh to Rs 50-lakh at 9 per cent and those above Rs 50-lakh, at 9.50 per cent.

Another private sector lender, Kotak Mahindra Bank and the group's car-loan financing arm also announced hikes in their home and car-loan rates respectively today.