Is it a right thing done by Banks saying no to uniform home loan rate cut?

Home loan demands depends more on price discounts offered by the developers rather than on reduction of interest rate on home loans. So depending on demands, bank can increase or decrease home loans irrespective of previous loans. With the increase in demand banks should increase the interest rate so that bubble does not occur.

LEt's accept a fact that banks do run on the principle of costing.  They can't lend below their cost.  When banks decide on interest cut, generally that applies to existing borrowers on floating rate, new loans, existing funded facilities. 

When interest rate offered on deposit is fixed, at the time of opening deposit, and will continue till maturity of deposit, making it as a load on the bank's funds, why cant the same principle hold good for loans also?  When we consider interest on deposit is a committment, why cant the same rule be applied to loans also??  But, to argue on these raw terms may not break ice.

However, still, benefit given to borrowers is a welcome note, without jeopardising interest of bank.

I feel, its better, if interest

I agree with Mr Ashok.

Though earlier borrowers may feel disgruntled with banks offering lower rates to new borrowers,they have no reason to feel soin view of the following:

1)terms of agreements made out previously specified

2)RBI allowing such discretion to banks only recently,only as a measure to stimulate the reality sector

3)borrowing cost of funds

T he only option in such cases is to seek refinance,by closure of old loan accounts and taking into consideration closure charges,if the same is beneficial to the existing borrower

Home loans are sactioned as agreed between the borrower and the banker at the time of sanctioning of loans, the borrower may adopt either fixed rate or at floating rate. Suppose if the borrower agreed to fixed rate the banker has got no right to alter the rate of interest otherwise the banker can.

Firstly, Home Loan rate was not equal in all Banks. RBI / Govt. prescribed some temporary measure to keep loan affordable, a measure to counter the recession. This was purely an 'one-time' measure and Banks agreed. The Govt. equally compensates Banks their losses for such 'dole-out' for charging lower rate (than their bench-mark rates).

Every bank decides rate cut or rate up in view of its cost of fund. And this is not equal with all Banks. Further, RBI do not interfeare in such decessions but they suggest / appeal to Banks.