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State Bank homes in on staff loans of govt agencies

Calcutta, Nov. 2: The State Bank of India (SBI) is in talks to take over the housing loans given to employees of state government agencies.

'We are in talks with seven state government agencies in Bengal for taking over their housing loan portfolios. Simultaneously, we are in talks with the Sikkim government for a similar exercise,' SBI (Bengal circle) general manager S.B. Nayar said.

SBI is eyeing transfer of loans worth Rs 100-200 crore in the Bengal circle. The bank had started this scheme in the Tamil Nadu and Kerala circles, where it was very successful.

The state government employees stand to gain from such an arrangement as they will have to pay lower interests on loans which were taken when the rates were high.

The Bengal government has already entered into a memorandum of understanding with SBI for new housing loans for its employees at a concessional rate. The bank has disbursed Rs 17.54 crore of housing loans to government employees in the first half of the current fiscal.

Nearly 20 per cent of the bank's new housing loan portfolio constitutes takeover loans, Nayar said.

'We are receiving 10-15 takeover cases everyday,' added State Bank assistant general manager (personal banking) Sumit Ghosh.

Nayar said Calcutta is witnessing a tremendous growth in housing loans. The total housing loan market in the eastern region is Rs 1,100 crore per annum. 'The Bengal circle enjoys a 40 per cent market share in this segment. The Bengal circle is growing faster than its western region counterpart,' SBI deputy general manager M. Sreenatha Sastry said.

In the first six months of the current fiscal, the total housing loan disbursals went up by Rs 316.29 crore to Rs 2898.85 crore on September 30 from Rs 2582.56 crore in March.

The bank has also set up an outbound sales force to provide doorstep service to its prospective customers.

The bank, for the first time, is organising a property fair called 'SBI Home Loan Mahotsav' in Calcutta from November 5 to 7 to boost its housing loan portfolio.

The bank will offer a 7.25 per cent floating rate for loans above Rs 5 lakh for a period of twenty years, which is 150 basis points lower than the present floating interest rate of 8.75 per cent on a 15-20 year tenure loan.

The maximum repayment age is considered up to 70 years and the bank will not charge any repayment penalty for loans closed after half the original tenure.

Nayar said the bank expects to garner a business of Rs 150 crore in the three days of the fair.

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