FM asks PSBs not to hike home loan rates

Finance Minister P. Chidambaram asked public sector banks not to increase interest rates on home loans up to Rs3mn (both old and new) and lend more to consumers even as the Reserve Bank of India (RBI) is trying to moderate credit growth to contain inflation. The Finance Minister also asked the state-owned banks to increase disbursement of auto loans as well as personal loans, including education loans by keeping interest rates affordable, according to reports. Most public sector banks have increased their benchmark primary lending rate (PLR) by 75 to 100 basis points, but agreed not to raise interest rates on existing home loans, auto loans and education loans.