Bank of Maharashtra (BoM) is a nationalized bank. As of 25 March 2021, it had 15 million customers across the country and 1900 branches.
It is under the ownership of the Ministry of Finance, Government of India. As of 31 December 2020, the total business had crossed Rs 266000 lakh crore.
Bank of Maharashtra reduced home and car loan rates aggressively. This made its interest charges below the rates offered by the State Bank of India and mortgage lender Housing Development Finance Corporation.
The headquarters of BoM, situated in Pune, reduced the home loan rates from 6.8% to 6.4% that is, by 40 basis points, and car loan rates from 7.05% to 6.8% that is 25 basis points. From 13 December these rates will be available to customers with the best credit scores.
The home loan rate at SBI is a minimum of 6.7% a year and the car loan rate is at 7.25%. HDFC’s home loan rate starts at 6.7%.
This reduction is to increase demand and increase the credit-deposit ratio. This was said by AS Rajeev, Managing Director, and CEO of Bank of Maharashtra.
As the increased credit will get more net interest income (NII), the current decrease in the rates may not have an impact on net interest margin (NIM). Mainly this is due to the change from investment to quality credit.
When most of the public sector lenders had a fall in the NII and NIM, BoM is one among the lenders who reported an increase in these ratios in the second quarter ending September compared to last year. Its NIM was at 2.57% last year and 3.27% in the second quarter.
AS Rajeev stated that there would be no sudden changes in the rates. He also stated that rates may continue to be at this level with a maximum of 25 basis points of upward movement.
Currently, the bank is anticipating home loans to grow at 25% higher than that of 20% growth it is now.
Among the industry, they are providing the lowest interest rates for housing loans and car loans, said Hemant Tamta, the Executive Director of BoM.
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