India's largest bank
SBI (State Bank of India) has done away with the 0.25% (25 basis points, A
basis point is equal to one-hundredth of a per cent.) mark up it used to charge
retail customers taking a housing loan to buy a third or a fourth house.
SEBI taken this step
in keeping with its thrust on retail loans, especially housing loans, as
corporate loan growth has turned sluggish.
SBI’s current card
rates on home loans are:
10% (that is 0.25%
above the base rate: 9.75%) for loans up to Rs 30 lakh..!
10.15% (0.40% above
the base rate) for loans above Rs. 30 lakh.!.
Own Third house..!
Indian banks normally
charge borrowers a premium (higher interest rate) if they take a loan to buy a
house for the second, third and fourth time.
The premium is to
offset the impact of higher risk weight & provisioning due to regulatory
classification of a loan taken to own a third house as commercial real estate
exposure.
Major bankers said,
''Across cases where borrowers (customers) owning ancestral property take a
loan to buy a home in the city where they work. Having repaid the first loan,
they are ready to take a second loan to buy another house (property)".
However, under the
current regulatory dispensation, the borrower (customer) is considered as owner
of two (2) properties and loan given by banks for the 3rd property is reckoned
as commercial real estate exposure.
A senior bank
official said, ''The decision to give a loan to buy a house, be it the 3rd or
the 4th, is solely based on the borrower’s income & ability to repay".
If the borrower has
repaid two (2) earlier housing loans diligently, then the probability of
default goes down significantly & the customer could be considered a safe
bet for the bank.
Src: The Hindu
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