Mumbai: In a bid to increase market share, ICICI Bank has launched a cashback feature in its home loans whereby borrowers will receive an amount equivalent to 1% of their annual repayment. The cashback for the first three years will be paid at the end of the third year, and annually thereafter.
The cashback feature is available on all new home loans taken out by both resident as well as non-resident borrowers. “This new home loan empowers borrowers to select their preferred mode of cashback. They can choose to utilise the cashback to prepay the principal outstanding of their home loan or take credit in their ICICI Bank account,” the bank said in a statement.
A borrower who avails a Rs 30-lakh loan for 30 years will be paying an equated monthly instalment (EMI) of Rs 22,749, or Rs 2.79 lakh annually. At the end of the third year, he will get a combined cashback of Rs 8,189 for the first three years, and Rs 2,720 every year thereafter. The cashback will not be available to defaulters.
“We have the largest mortgage portfolio among private sector banks in the country. We foresee that a combination of young population and rapid urbanisation will lead to the emergence of growing demand for housing in the country. We believe that this proposition will propel customers to fulfil their aspirations of owning a home,” said Anup Bagchi, executive director, ICICI Bank.
The feature is available for loans of any amount for tenures of 15-30 years. Those who have loans with other institutions can get the cashback loan if they choose to refinance with ICICI Bank. The cashback will start to accrue from the first EMI itself. It will first get credited to the customer after completion of the 36th EMI,
Subsequently, after every 12th EMI, it will get credited to the customer. This new offer is also available for other mortgage products like loan against property, lease-rental discounting and top-ups on existing mortgage loans.The new product comes at a time when banks are witnessing a slowdown on credit growth. Year-on-year loan growth stood at 6.9% as on September 15. Data released by the RBI showed that in the first four months of FY18 up to July, home loan growth slowed down to 0.4% with the housing portfolio of banks increasing by a mere Rs 3,600 crore to Rs 8.64 lakh crore.