The move goes against RBI's hint of withdrawal of easy money policy.
At a time when the Reserve Bank of India (RBI) has signalled withdrawal of the easy monetary policy, two large banks have cut interest rates for retail loans.
The country's second-largest public sector lender, Punjab National Bank, slashed the interest rate on auto loans by 50 basis points (BPS) and announced a waiver of processing and documentation fees.
Private sector lender Axis Bank announced a special home loan scheme under which the interest rate for the first year will be 8.0 per cent. There will be floating rate for the remaining tenure.
The offer is open till December 10. The bank has also extended the maximum repayment period for its standard home loan period to 25 years.
PNB has extended its Festival Bonanza scheme for home loans up to December 31. As part of the offer, the bank will charge 8.5 per cent for the first three years of the loan and waive processing and documentation charges.
The public sector lender simultaneously reduced the rate on deposits by 25 to 50 basis points in select maturities. With the current reduction, the highest interest rate on retail term deposits will be 7 per cent. The revised rates will be applicable from November 11.
Another New Delhi-based state-owned bank, Punjab & Sind Bank (PSB), has slashed interest rates on agriculture loans by 2 per cent to help farmers in the rabi season. The peak-level rate of 13.5 per cent has been brought down to 11.5 per cent per annum.
The National Bank for Agriculture and Rural Development (Nabard) has reduced interest rates on refinance for investment credit by 50 basis points for lending by various rural financial institutions. For commercial banks, the rates will be 8 per cent.
