Bank of Baroda cuts interest rates on car, mortgage loans

Bank of Baroda has reduced its interest rates on car loans and loans against property with immediate effect, the bank said on Thursday. The move comes in addition to the rate cuts the bank implemented following the Reserve Bank of India’s 100 basis points reduction in the policy repo rate, it said. With the revision, floating interest rates now start from 8.15% per annum, down from 8.40% earlier, the bank said in a statement. Mortgage loans have also been lowered to 9.15% per annum from 9.85%.“Bank of Baroda is pleased to introduce a special offer on our car loan rates that makes car ownership more accessible and affordable. Public banks gain pricing edge in a competitive market In addition, our mortgage loan offering is now even more competitive giving a great opportunity to unlock higher value for property and customers can raise additional funds with reduction in interest rates from 55 bps to 300 bps depending on CIBIL score,” said Sanjay Mudaliar, executive director, Bank of Baroda.The bank also offers fixed-rate interest on Baroda Car Loans, linked to its six-month marginal cost of funds-based lending rate (MCLR), starting at 8.65% per annum. ALSO READ Bajaj Allianz to directly pay if cashless services denied Following the RBI’s repo rate cut, several public sector banks—including State Bank of India, Union Bank of India, and Central Bank of India—have reduced their auto loan rates in recent months, while private sector banks have been a bit hesitant.“Public sector banks, benefiting from relatively lower funding costs, continue to maintain a pricing advantage over their private sector counterparts,” Sachin Sachdeva, vice president, sector head – financial sector ratings, Icra said. He added that with housing loans already priced at competitive rates, there is limited scope for further spread compression in that segment. ALSO READ IPPB seeks lifting of hiring freeze as it turns profitable Strategic shift to revive retail credit growth As a result, banks are exploring alternative asset classes like vehicle loans to target growth, while managing profitability.“Credit growth has moderate from the elevated levels observed over the past two years. Growth in the corporate segment continues to be modest, while the retail segment—particularly unsecured personal loans—has also seen a slowdown amid rising concerns around asset quality. This has led banks to adopt a more cautious stance. To sustain credit growth, they are increasingly focusing on asset classes that offer better risk-adjusted returns,” he said.