Country’s largest lender State Bank of India (SBI) has revised its home loan rate to 6.95 per cent effective April 1.
With the revision, the lowest rate of 6.70 per cent regime for limited period ended in March 31.
During the limited period, the bank offered home loan starting from 6.70 per cent for loans up to ₹75 lakh and 6.75 per cent for loans in the range of ₹75 lakh-₹5 crore.
As per information posted on its website, the new rate effective April 1 is 6.95 per cent.
Compared to teaser rate for the limited period, the new rate is 25 basis points higher at 6.95 per cent.
The hike in minimum home loan rate by SBI is likely to prompt other lenders to follow suit.
The bank will also levy a consolidated processing fee on home loans. This will be 0.40 per cent of the loan amount and goods and services tax (GST) subject to a minimum of ₹10,000 and maximum of ₹30,000 plus GST.
Last month, SBI had in waived off home loan processing fees till March 31 to cash in on festive fervour.
India’s largest lender, State Bank of India (SBI) has cut home loan rates by 70 bps to 6.70% for a limited period offer which will be ending on 31st March 2021.
Further the lender is also giving 100% waiver on processing fees. The lender said, ” The interest concession are based on loan amount and CIBIL score of the borrower. SBI believes that it is important to extend better rates to customers who maintain good repayment history.”
SBI Home loan interest rates are linked to CIBIL score and start from 6.70% for loans upto Rs. 75 lakh and 6.75% for loans above Rs. 75 lakhs. Customers can also apply from the ease of their home via YONO App to get additional interest concession of 5 bps. On the eve of International Women’s day, a special 5 bps concession is being made available to the women borrowers.
Saloni Narayan, DMD (Retail Business), SBI said, “Our customers have complete trust in us because of our total transparency. The reduced interest rates are one of the best interest rates in Home Loans anyone can wish for.”
Last month SBI had achieved the mark of Rs 5 trillion in its home loan business and is projecting touching Rs 7 trillion mark by 2024.
Back then, Dinesh Kumar Khara, Chairman at State Bank of India said, “We are the cheapest home loan provider and we have the best quality loan profile with very less NPAs. We hope to continue the same growth.”
Khara added, “We have always treated home loans as a growth driver for the nation and not just as mere transactions. We, at SBI, will continue focusing on enhancing customer delight that will in-turn enable the bank to scale newer heights.”
The bank is gearing up to adopt the co-lending model for home loans, which will help boost its footprint in the unorganised sector.
The State Bank of India (SBI) has crossed the Rs 5-lakh crore mark in the home loan business and expects to double the size of its portfolio over the next five years, chairman Dinesh Khara said on Wednesday. The bank is gearing up to adopt the co-lending model for home loans, which will help boost its footprint in the unorganised sector.
Khara said while the book had grown to the current level from less than Rs 1 lakh crore in 2011, the pace of growth from here on would be much faster. One of the reasons being the definite change in the country’s demographic, with the younger generation looking to acquire homes at a much younger age, as compared to what it was 10 years ago.
“We have observed that 42% of our home loan customers are from the age bracket of below 40 years. I feel that going forward, we will see a much greater shift in this direction and the increase in earnings of the younger generation, their aspirations and the concept of nuclear family are going to be the contributing reasons for people to apply for homes at an early age,” Khara said, adding, “If I may hazard a guess, I would say that maybe in five years (the portfolio will double), not 10 years.”
SBI is extending builder loans and also approving their projects in anticipation that offtake will improve. When it comes to builder-approved loans, its turnaround time is about five days. Khara said the bank has a market share of about 35% among all scheduled commercial banks and going forward, home loans will be a major focus area for the lender within the retail segment. SBI is also looking to implement artificial intelligence (AI), cloud, blockchain and machine learning, which can play a pivotal role in propelling not only the home loan business, but also other businesses.
He sought to allay concerns about the quality of retail loans at a time when job and income losses have plagued a fairly large segment of the population. The home loan portfolio’s gross non-performing asset (NPA) ratio is at 0.67-0.68%. Of 39 lakh-odd borrowers who were eligible to be considered under the Reserve Bank of India’s (RBI) restructuring plan, only about 10,000 customers have actually availed the restructuring option, which aggregates to about Rs 2,500 crore. “So if we look at a book size of Rs 5 lakh crore, out of that only Rs 2,500 crore has been put through restructuring. These two parameters give a very clear reflection about the quality of the book which we have,” Khara said. He pointed out that 72% of SBI’s customers are in the salaried bracket and are in a position to honour their commitments pretty well.
Of the Rs 5-lakh crore portfolio, home loans account for Rs 4.86 lakh crore and builder finance is about Rs 11,000 crore. About 2 lakh customers have been extended loan facilities in the affordable segment.
The bank has been seeing a trend of balance transfers of home loans, even as pool purchases have nearly halted. “Metro locations are normally very sensitive to interest rates and we have been successful in having about 23% of Rs 5 lakh crore on account of takeover. For more than a year now, we have not been making pool purchases. Whatever pools we had purchased, that is also coming down. So it’s about Rs 4,000 crore,” Khara said.
State Bank of India (SBI) expects to double its home loan portfolio in the next five years to ₹10 lakh crore on the back of higher economic growth growth and demographic dividend.
India’s largest bank took about 10 years to grow its home loan portfolio from ₹89,000 crore in FY2011 to cross the ₹5 lakh crore mark now, according to Chairman Dinesh Kumar Khara.
He emphasised that delinquency in the home loan portfolio in terms of gross non-performing assets (GNPAs) is only 0.68 per cent of the portfolio. Khara said with the implementation of the retail loan management system, SBI will be in a position to crunch the average home loan turnaround time to 5 days from 12 days.
CS Setty, Managing Director, said 60 per cent of the existing customers had a credit score of 750 & above. Khara observed that the average home loan ticket size has gone up from ₹25 lakh two years ago to ₹31 lakh now, Khara added.
Of the ₹5 lakh crore home loan portfolio, almost 23 per cent is by way of balance-transfer, especially in metros, from other lenders, he said. Of the total home loan portfolio, ₹4.86 lakh crore is to the individual borrowers and the balance is towards builder financing.
Country’s largest lender said this growth was achieved in the last 10 years.
Dinesh Kumar Khara, Chairman at State Bank of India said, “We are the cheapest home loan provider and we have the best quality loan profile with very less NPAs. We hope to continue the same growth.”
Khara added, “We will achieve next Rs 5 trillion in 5 years.. and not 10 years.”
Speaking on a media call, he added, “We are also supporting the builder community and and approving their projects.”
SBI‘s flagship digital banking proposition YONO recorded 8% disbursals under the home loans.
On being asked about the home loan rate going forward, he said, “Only time will tell when will revise the Rate of interest.”
He also added that amongst all lenders SBI has the largest book of affordable housing finance under the Pradhan Mantri Aawas Yojana (PMAY).
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