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ICICI Bank offers 1% cashback on home loans

LiveMint logoLiveMint 28-09-2017 Malvika Joshi

Mumbai: ICICI Bank on Thursday announced a cash back scheme for new home loan borrowers. Under the scheme, borrowers will receive an amount equivalent to 1% of their annual repayment.

The scheme will be eligible for home loans with minimum duration of 15 years and maximum tenure of 30 years. The cashback will start to accrue from the first equal monthly instalment itself. The accrued amount, however, will first get credited into the borrower’s account after three years and annually thereafter.

“Customers can choose the mode of cash back. The amount accrued can either be used for prepayment of the principal amount outstanding or it can be credited to the customer’s account,” Anup Bagchi, executive director, ICICI Bank, said in a conference call.

The launch of the scheme comes at a time when credit growth is seeing a slowdown. According to the data released by the Reserve Bank of India, between April and July 2017, the growth in home loans was a dismal 0.4% against 4.7% a year ago.

The scheme may help boost the private lender’s market share as it allows customers of other banks to transfer their home loans to ICICI Bank. It may also increase the customer engagement with the bank as the scheme structure dissuades borrowers from prepaying their loans. Both resident and non-resident customers are eligible for the scheme.

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