UCO to slash interest rates on home and education loans

Kolkata – headquartered UCO Bank will be slashing interest rates on home loans and education loans. In an interview given to Business Standard UCO Bank Chairman and Managing director S K Goyel said, "Home and education loans will be our focus areas for the current financial year and hence we do not mind giving a little interest rate concession to our customers. Though the matter will be discussed at the next board meeting, we are likely to slash lending rates on these items by 25 to 50 basis points."

In home loan segment new rates will be valid for advances up to Rs 30 lakh, which is in line with RBI's decision to reduce the risk weight to 50 per cent on home loans up to Rs 30 lakh.

He added, "With home loans up to Rs 30 lakh coming under the priority sector lending, this will be our special focus area in the category."

The total exposure of home loans as on April 30, 2008, was Rs 3,257 crore however housing loans showed a growth of 15 per cent during the last financial year.

At present, in this category floating interest rates vary between 9.75 per cent and 11.75 per cent, depending upon the term and the amount of the loan.

"We are looking at a growth of 20 per cent in home loan advances in the current financial year," Goyel said.

While in education loan segment UCO Bank advanced worth Rs 336 crore at the end of April 30, 2008, and interest rates in this category range between 11.25 per cent and 11.75 per cent.

Bank advances in education loan segment posted a growth of 38 per cent during the financial year 2007-08.