Bank of Maharashtra cuts personal loan rates by up to 40 basis points

Faced with competition from its financial colleagues, the Bank of Maharashtra (BoM) has cut rates on loans to individuals – home and vehicle – by up to 40 basis points.

The revised rates are linked to borrowers’ credit scores and are effective December 13. AS Rajeev, Managing Director (MD) and CEO (CEO), BoM, said the bank has revised rates to between 10 and 40 basis points that are tied to a person’s CIBIL score.

“Many of the bank’s clients have savings accounts with us, but have taken out loans, especially for housing, from other financiers,” he said.

The public sector lender will try to bring them back into its fold. The rate of the new home loan will be 6.4% (against 6.8%) for those with a credit rating greater than 800.

Competing lenders provide loans at a rate between 6.5 and 6.8 percent. The bank’s home loan portfolio is growing by around 20% year-on-year and is expected to grow 25% by the end of fiscal 22, Rajeev said.

Outstanding home loans from the Pune-based lender stood at Rs 19,112 crore as of September 2021.

In addition, auto loans will be available at 6.8% against the old rate of 7.05% for people with high credit scores, the bank said. Its vehicle loan portfolio is small at Rs 1,844 crore as of September 30.

Asked about the impact of the rate cut on the net interest margin (NIM), he said the cost of funds is low at 3.44% (September 2021) with a share of current accounts and accounts payable. savings (CASA) from 53 to 54% in total deposits. .

This allows the benefits to be passed on without damaging the NIMs too much. Its NIM was 3.27% in the second quarter of fiscal 22.

Obtaining borrowers with high credit scores would help lower the cost of credit and improve the profile. The investment cycle is changing and the use of corporate sanctioned credit limits is increasing. This will contribute to a 16-17% growth in loans by the end of the current fiscal year, he said.

Its gross advances increased 11.44% year-on-year to 1.15 trillion rupees in the second quarter of fiscal year 22, from 1.3 trillion rupees a year ago.

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