Pune-headquartered Bank of Maharashtra has bucked the trend to cut home loan interest rates while peers have gone the other way following Reserve Bank of India’s monetary tightening policy.

The state-owned bank has reduced interest rate on home loan rates from 30 basis points to 70 basis points with effect from 17 October. 

After the revision, home loans of the bank will be available for its retail customers at 8% as part of the festive offer. The bank currently offers home loans starting at 8.3%. The rate varies depending on the borrower's credit score.

Besides the home loans, the bank has also reduced interest rates on personal loans to 8.9%. Earlier, these loans were priced at 11.35%.

The car loans of the bank are priced at 8.70%.

The lender has already waived processing fee for its gold, home and car loans under the 'Diwali Dhamaka' offer.

By introducing this offer, the bank is offering one of the lowest interest rates in retail loans, especially home and personal loans, in the banking industry.

Market leader State Bank of India (SBI) and mortgage lender HDFC Ltd are offering discounted interest rates on home loans beginning at 8.40%.

“At a time when interest rates are rising across the spectrum in line with the rising policy rates, Bank of Maharashtra is making retail loans cheaper to bring cheer among customers during the festive season,” the bank said in a release.