SBI will soon have many happy customers. Know why!
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‘Achhe din’ seems to have arrived for the existing customers of In a bid to boost the bank's loan book and compete against the rival banks, the existing personal loan interest rate of 13.50-18.50% has been slashed by almost 3-8% for its existing home loan clients.
So now, an existing borrower can avail a personal loan from SBI at 10.15%, provided he had been paying his homeloan EMIs on time. For women, this will be even cheaper at 10.10%. The rates imply a 0.35-0.40 percentage point cut in the top-up loan rates that SBI has been charging.
SBI has also waived off the processing fee to lure its customers, however the reduction is valid only for a limited period. The bank plans to charge its existing home-loan borrowers 10.5% for top-up loans from next fiscal year. The ET report further suggests, a woman home-loan borrower can take up to Rs 50 lakh at 10.10%. The tenure of the top-up loan will be linked to the customer's outstanding tenure of the home loan. Top-up loans between Rs 50 lakh and Rs 2 crore will cost 10.75%. For Rs 2 crore to Rs 5 crore, the rate will be 11.25%.
Analysts believe that this move will help SBI achieve its loan growth targets.
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The bank has lowered its credit growth target to 11% for this fiscal year through March from the originally planned 14%.
"Even 11% (growth in credit) is also a stretch," Chairman
Despite nods from the central bank and the finance ministry the banks have mostly stayed away from cutting rates, citing subdued demand for loans and arguing that a reduction would hurt their bottom lines in the final quarter. Most banks have pegged a base rate of 10% to 10.25%, below which they don't lend.
Till last month, home-loan book has risen 13.2% year-over-year to about Rs 1.56 lakh crore and top-up loans totalled at Rs 4,800 crore.
(Image: India Times)
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