With most public and private sector banks having reduced the lending rate on retail loans, urban co-operative banks are expected to follow their lead. The co-operative banks are expected to take a decision on lending rates after the announcement of the Reserve Bank of India?s credit policy later this month.

The Reserve Bank of India (RBI), in its pre-credit policy meeting, has sought data from all banks on differential prime lending rates (PLR) charged to the customer. Most banks have different benchmarks for different retail loans. For example, some banks have a separate home loan PLR, an auto loan PLR, and so on. However, the RBI had wanted the banks to have one benchmark PLR (BPLR) and charge a spread over that depending on their cost of funds and margins.

UCO Bank has announced festival discount of 0.25% on its new home loans under UCO Shelter. The discount is available only for loans up to Rs 20 lakh, on both fixed and floating rate housing loans. The discount will be available up to December 31, 2007, on both fixed and floating. Existing home loan rates are:

Above a loan tenure of 20 years, fixed interest rate on loan up to Rs 20 lakh is 10.25 per cent (if the margin up to 25 per cent) and 10.50 per cent, if the margin is more than 25 per cent. Home loans at floating rate of interest for more than 20 years, the interest rates are: 11 per cent (if the margin up to 25 per cent) and 11.25 per cent, if the margin is more than 25 per cent.

The current interest rates are: For loans up to Rs. 20 lakh, for as period of up to 5 years, interest rates have remained unchanged; at 10 per cent and 10.5 per cent for loans above Rs 20 lakh. For a period of 5 to 10years, the interest rates on loans up to Rs 20 lakh is 10.50 per cent (11 per cent previously) and 11% ( 11.50 per cent) for loans above Rs 20 lakh for the same period. Floating home loans of up to Rs. 20 lakh for 10-20 years is 10.5 per cent (11per cent) and 11 per cent (11.50 per cent) for loans above Rs 20 lakh for the same period.

Bank of Baroda (BOB) has once again, reduced the interest rates on new home loans. This is the second round of reduction in the last 45 days, with floating home loan interest rates reduced by up to 75 basis points to 10-10.5 per cent.