State Bank of India
(SBI) has reduced interest rates on housing loans by 0.05 to 0.15%, a move
which will mainly benefit big-ticket home loan borrowers.The bank will charge a
woman borrower 10.10%, and other borrowers, 10.15%, irrespective of the loan
amount.
Earlier, for a woman
borrower, the bank used to charge 10.10% on housing loans up to Rs. 75 lakh,
and 10.25% for loans above Rs. 75 lakh.
Other home loan
borrowers were charged 0.5% more for the same slab. The SBI said that the
revised rates would kick in from August 26, 2014.
The reduction in rate
will boost big-ticket housing loans & reduce the interest burden for women
borrowers.
A senior SBI official
said the share of bank's housing loans in metro cities is 44% & the reduced
rates will increase sales in metros such as Mumbai & Bangalore where
property prices are already high, starting from Rs. 70 lakh.
Second, the cost of
operating a high-value account is much less and the chances of defaults too are
low in this portfolio, he added.
A SBI official, who
did not wish to be identified, said that the move to reduce rate is also to
incentivise women to own property. The SBI launched a special scheme for women
housing loan borrowers in December 2013 wherein it charged them 0.05% lower
rate of interest than others. However, this comes with the condition that a
woman borrower has to be the first owner of the property.
One-fifth of the new
home loans disbursed since the launch of the special scheme in December 2013
are to women borrowers. On an average, SBI provides Rs. 35,000 to Rs. 40,000
crore housing loans a year.
As of July this year
(2014), the bank's loan book stood at Rs. 1.46 lakh crore. The decision to cut
rates will force rival home loan providers (like ICICI Bank and HDFC) to
revisit their housing loan structure, officials from the banking circles said.
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