Mumbai : The country’s largest lender State Bank of India (SBI) on Wednesday
announced up to 25 basis points (bps) concession on home loan rates as
part of its festival offers. SBI home loan customers would get an
interest concession of 25 bps for buying their dream homes of above Rs
75 lakh based on CIBIL score and through YONO app.
“In an extension of its festive offers announced recently, SBI offers
a credit score based concessions of up to 20 bps from 10 bps earlier,
for a home loan of above Rs 30 lakh to Rs 2 crore across India. The
same concession would also be applicable for home loan customers for a
loan amount of up to Rs 3 crore in eight metro cities. An additional 5
bps concession for all home loans is given if applied through YONO,”
said the lender.
SBI now offers interest rates starting at 6.90 per cent for a home
loan of up to Rs 30 lakh and 7 per cent for above Rs 30 lakh.
SBI commands nearly 34 per cent market share in home loans and nearly
33 per cent in the auto loans segment.
SBI has already announced a slew of special offers for its retail
customers with 100 per cent processing fee waiver on car, gold,
personal loans. Retail customers are availing the lowest interest rate
starting from 7.5 per cent on a car loan, 7.5 per cent on gold loan
and 9.6 per cent on personal loan respectively.
The concessions have been rolled out after the RBI Monetary Policy
announcement the public sector behemoth said in a release.
In a bid to boost demand for high value home purchases and thereby the
housing sector, the RBI in its monetary policy announcement allowed
banks to only consider the Loan to Value Ratio (LTV) while setting the
risk weights (capital that banks have to set aside) for new home
loans. Till now, the risk weight of home loans was determined on the
basis of loan amounts and LTV ratios. Higher loan amounts led to
higher risk weights, requiring banks to set aside higher capital while
sanctioning the loan. The latest announcement regarding the home loan
risk weights has done away with the requirement of factoring in loan
amount while setting risk weights for fresh home loans sanctioned till
March 31, 2022. The move would benefit incremental housing loans in
higher ticket size of over Rs 75 lakh (below 80 per cent LTV) which
currently attracts 50 per cent risk weight. Experts said that the move
should reduce capital cost for banks and help in transmission and
therefore improve credit offtake. All fresh home loans with LTV ratios
of or less than 80 per cent will attract risk weight of 35 per cent
whereas those with LTV ratios of above 80 per cent to 90 per cent will
attract risk weight of 50 per cent.
CS Setty, MD (Retail & Digital Banking), SBI said “We are pleased to
announce additional concessions for our prospective home loan
customers this festive season. With SBI’s lowest interest on home
loans, we believe this move will facilitate and encourage home buyers
to plan their dream house. With the nation all geared up to the
post-Covid era, we are witnessing increased customer demands and we at
SBI will continue to offer lucrative benefits suiting needs and
requirements of the customers.”