I have an ongoing loan with IDBI at 11% floating interest rate. Sometime two months ago, they sent me a letter home saying the interest rates have gone up and its now 12%. I had anticipated that they would resort to such a thing. But what no bank expected is the liquidity crunch that caused the current global recession. This has now brought down the prices of everything – groceries, fuel, automobiles, clothes, what not! Can the banks be left far behind? How long will private banks analyse the moves made by RBI & SBI? Is it not logical that it cant and wont be for long?! Precisely. I got another letter from IDBI who have now lowered the interest rate from the current 12% to 11.25% (somewhere near my original figure). And I would not be surprised if it does go down further all the way upto 10%. But that might take some time.
For now its cheerful to get such a letter in difficult times. I keep my fingers crossed!