SBI Cuts Home Loan Rates, Will Others Follow?

MUMBAI: State Bank of India slashed home loan rate by up to 0.15 percent on housing loan, a move likely to be followed by other lenders.

Home loans of up to Rs.75 lakh (Rs.7.5 million) would now be available to fresh borrowers at 10.10 per cent against the existing rate of 10.15 percent, State Bank of India said in a statement.

The bank has removed the additional concession of 0.05 per cent given to women borrowers earlier and has brought in uniformity to all borrowers.

With regard to loans of above Rs.75 lakh, the new rate would be 10.15 percent from the existing rate of 10.15 percent, down by 0.15 percent.

"It has now been decided to offer uniform interest rate on home loans with effect from August 26, irrespective of the loan amount," it said.

SBI home loans is available under two slabs -- under Rs.75 lakh and above Rs.75 lakh.

Previously, the interest rates on home loans were revised downwards on December 20, 2013 with a separate interest rate structure for woman borrowers at 10.10 per cent (on loans up to Rs 75 lakh) and 10.25 percent (on loans above Rs.75 lakh) too, it said.

In the August review of monetary policy the RBI kept short-term lending rate unchanged at 8 per cent, while the cash reserve ratio remained at 4 per cent citing upside risks to inflation in view of uncertain monsoon and its impact on food production as also volatile international oil prices.

Subsequently, the bank rate was retained at 9 percent.

In order to infuse additional liquidity, RBI decreased SLR for banks by 0.50 per cent to 22 per cent with effect from the fortnight beginning August 9.

A similar move in June had released an additional Rs.40,000 crore (Rs.400 billion) into the system.

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