In a bid to stimulate
demand, the State Bank of India (SBI) on recently reduced its housing loan
rates by 0.15%-0.25%. The India's leading lender also cut the interest rates
for women borrowers by another 0.05%. The bank's housing loan portfolio now
stands at over Rs. 1.3 lakh crore.
For home loans up to
Rs. 75 lakh, rates have been cut to 10.15 % per annum and, for those above Rs.
75 lakh, the revised rate stands at 10.3 %, the bank said in a statement.
For women borrowers,
these rates are 10.10 % and 10.25 %, respectively. The bank classifies women
borrowers as those who fill loan applications alone or / are first
co-applicants & will own the
property themselves or / will be first
co-owners.
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The move comes more
than a month after SBI raised its base rate by 0.2% to 10 % in November, 2013
to counter the rising pressure of higher cost of funds. Around the same time,
HDFC Bank also hiked its base rate to 10 %. SBI, which is also the leader in
the housing loan market, had raised its base rate after the Reserve Bank of
India (SBI) hiked repo rate by 0.25% to 7.75 % on October 29, 2013.
Now, Canara Bank has
the lowest base rate in the industry at 9.95 %. The base rates of SBI, HDFC
Bank & ICICI Bank all stand at 10 % each, while most large lenders offer a
base rate of 10.25 % to customers.
Earlier, SBI charged
10.3 % for loans up to Rs. 30 lakh and 10.5 % for loans above that mark. The
revised rates will be applicable from Friday, the statement said.
The revised equated
monthly instalment (EMI) per lakh for a loan tenure of 30 years will be Rs. 885
for women customers and Rs. 889 for all other customers against the prevailing
EMI of Rs. 900, the bank said.
SBI became the first
lender to reduce interest rates after RBI's monetary policy announcement on
Wednesday. The central bank RBI chose to not tinker with the repo rate even
while retail inflation rates are soaring.
Bankers agree that
any further decisions on their lending rates would depend on the liquidity
position in the industry. If liquidity tightens and banks are required to raise
deposit rates, the banking system may look at revising their lending rates
upwards, bankers agreed.
Src: FE
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