Amid promises by the government of India to increase funding to public sector banks, two leading state-owned lenders cut their interest rates on auto and consumer durable loans.
Punjab National Bank (PNB) reduced its auto loan rates on fixed basis by more than one percent to 10.65 percent. Loan rates for two-wheelers are reduced to 12.25 percent.
The New Delhi-based bank also cut the interest rate on fixed basis on consumer durable loans to 12.75 percent.
PNB is offering 100 percent financing of a car’s ex-showroom price. The offer is available until January 31, 2014 only.
Meanwhile, OBC reduced its auto loan rate on four-wheelers from 12.25 percent to a flat 12 percent.
Likewise, the interest rate for consumer durable and personal loans is down to 12.5 percent for government employees and 13.5 percent for private sector employees.
After a meeting between Economic Affairs Secretary Arvind Mayaram, RBI Governor Raghuram Rajan and Finance Minister P Chidambaram, the government decided to provide more funds to public sector banks so they can distribute more loans to consumers to perk up demand and battle downturn.