SBI Ruled Out Dual Home Loan Rate Scheme
State Bank of India has gone through teaser loan scheme by the Reserve Bank of India (RBI) in early 2009 but now ruled out relaunching a dual rate scheme for home loans due to its paying a stiff price in the form of huge provisioning. ICICI Bank and HDFC have already come up with teaser loan schemes which are offered at a low interest rate in the first few years, after which they are reset at higher rates.
SBI’s chairman P Chaudhuri said the bank had tried to reason with the regulator but it has a point. SBI has already provided (at two per cent) about Rs 500 crore for the teaser loan portfolio. It is a stiff penalty (high provisioning) and the bank will not like to go through it again.
Such fixed-cum-floating housing loan schemes disappeared from the market this April after RBI expressed concerns that these might affect the asset quality of banks.
Business Standard
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