An official from the state-run lender has hinted that it may make changes to its teaser home loan rates from the next fiscal
The country's largest lender, State Bank of India, has hinted that it may consider retaining its much-talked-about 8% home loan scheme, albeit with slight modifications in the product, reports PTI.
"I suppose there can be modifications (in the products), which will be in tune with our liquidity position. Normally, we don't kill any product," a top SBI official told PTI here.
SBI was the first to rollout the dual-rate special home-loan schemes or 'teaser' schemes in the market, at a time when credit demand in the domestic market was abysmally low after the global financial turmoil dented confidence and discouraged individuals and corporates to borrow.
Most of SBI's competitors, including mortgage lender Housing Development Finance Corporation and ICICI Bank, had followed SBI by launching similar schemes, but later withdrew them, partly owing to the Reserve Bank of India's disapproval of such products and drying liquidity.
"I think it is the best home-loan product in the market. It is a very successful product. The way it helped other sectors to grow like steel and cement and contributed to the overall economic growth is tremendous," the official told PTI.
However, the RBI was not happy with banks offering 'teaser' schemes as it was concerned about the ability of borrowers to service the interest rates when they reverted to the normal level after the expiry of the offer period.
RBI deputy governors, Usha Thorat and K C Chakrabarty, had openly expressed their concerns about the scheme. "Teaser rates by banks are a cause of concern. Banks must ensure that borrowers can service higher rates when rates return to normal," Ms Thorat had said.
Mr Chakrabarty, on the other hand, asked banks to extend the benefit of cheaper home loans to previous customers as well.