Co-operative Bank has cut interest rates for personal loans and asset financing in a move targeting select salaried borrowers such as civil servants who have a good repayment history.
The lender said on Thursday, without specifying the number of qualifying customers, it has cut the rate from 14 to 13 percent per year, effective April 1.
Co-op Bank said the cut was in response to improved loan repayment records and reduced default risk that the targeted check-off scheme loans have recorded over time.
Salary check-off loans are credit facilities provided to individuals who are employed and use their salary as security for accessing loan facilities.
The move bucks the trend in the sector where interest rates have been increasing amid the continued switch to risk-based pricing models and the rise in the base lending rate to 9.5 percent —the highest level in five years.