Once again said: SBI has no plan to launch teaser home loan

Mr. Pratip Chaudhur, Chairman Of SBI

India's largest bank SBI, under the chairmanship of Chaudhuri’s predecessor OP Bhatt, was the first lender to offer teaser products in the days of ample liquidity in November 2009. Courtesy the product, it gained a dominant position in the housing loan segment by overtaking HDFC.

SBI recently  made it clear that it will not be joining its rivals in launching a similar product this time around.

Mr. Pratip Chaudhur, Chairman Of SBI said,  “SBI have no plans as of now to launch any special home loans,”

Reminiscing of the bank’s earlier brush with the RBI ( Reserve Bank of India) in this regard, he said, “We have been through the teaser loan definition. We respect the regulator’s stance.”

India's largest private bank ICICI Bank had, 15 days ago launched a dual rate home loan product which offers fixed interest rate to start with after which the loan turns floating. The announcement was followed by the launch of a similar product by India's old mortgage major HDFC too this recently..

Talking of the bank’s earlier experience, Chaudhuri said, “We SBI had tried to argue (with the RBI), to reason, but the regulator has a position and already we have provided 2% on our teaser loan portfolio that is Rs 500 crore. I think it was a stiff enough penalty and we would not like to live through it again.

”Fearing an asset bubble build-up and to contain the impact, the RBI had increased the provisioning for such assets by a steep five fold to 2% recently.

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