The Telegraph
Since 1st March, 1999
Email This PagePrint This Page
State Bank offers cheaper home loans

Mumbai, Nov. 7: The State Bank of India, the country’s largest commercial bank, today said it will lower interest rates on housing loans by 0.25 per cent (25 basis points) across all tenures.

SBI, which off late is focussing on growing its retail loan portfolio, is probably the first bank to announce a cut in the home finance segment.

The move follows close on heels of its aggressive cut in deposit rates by almost 50 basis points soon after the Reserve Bank of India lowered the bank rate in its mid-term review of the monetary and credit policy.

SBI said it would cut the prime lending rate, medium-term lending rate and short-term advance rate by 0.25 per cent with effect from this month. Bank officials further said the new floating rate for a five-year loan would be 9.25 per cent as against 9.5 per cent earlier.

They said it was the third time in the last four months that the bank has resorted to a cut in lending rates. The first cut was affected in July, which was followed by similar cut a month later.

Officials said the bank also lowered the rates for loans with tenure of five to less than 10 years and 10-20 years to 9.75 per cent from 10 per cent and 10.25 per cent from 10.50 per cent respectively.

The processing fee of 50 basis points or half a percentage point of the loan amount has been waived till January 31, 2003.

Sources said interest on housing loans taken on fixed rate for the reporting three tenures would be 9.50 per cent (9.75 per cent), 10 per cent (10.25 per cent) and 10.50 per cent (10.75 per cent) respectively.

At the time of the announcement of its half-yearly results, SBI had claimed that its housing loan portfolio had grown by Rs 1,923 crore (Rs 1,106 crore in same period of last year) and stood at around Rs 10,123 crore.

Bankers say that ICICI Home Finance is also set to review interest rates in its forthcoming asset-liability committee meeting, to be held next week.

SBI sources said the average housing loan size in urban areas was Rs 5 lakh, while in the rural sector it was around Rs 2 lakh. Circle-wise growth has been topped by Hyderabad at Rs 328 crore followed by Mumbai at Rs 318 crore, they said.

Others are Delhi (Rs 187 crore), Bangalore (Rs 186 crore), Lucknow (Rs 175 crore), Chennai (Rs 156 crore), Bengal (Rs 121 crore), Bhopal (Rs 116 crore), Bhubaneshwar (Rs 93 crore), the north east (Rs 14 crore) and Gujarat (Rs 31 crore.

UBI cuts deposit rates

United Bank of India (UBI) today announced a downward revision in interest rates of domestic term deposits by 25 basis points, adds PTI.

The new rates, to be effective from November 9, would apply to fresh term deposits and renewal of existing term deposits, UBI said in a release.

As per revised rates, deposits of 15 days to 45 days would fetch interest at the rate of 4.50 per cent while interest rates on deposits of 46 days to 90 days would be 5.50 per cent.

Deposits of 91 days to 179 days would earn 5.75 per cent interest, 6 per cent for 180 days to less than one year, 6.50 per cent for one year to less than two years and 6.75 per cent for two years to less than three years, the release said.

Email This PagePrint This Page