The country's largest lender, State Bank of India may be increasing the tenor of teaser loan scheme further. But this decision is entirely dependant on the liquidity condition of the bank.

SBI currently enjoys surplus liquidity of Rs. 40,000 crore as on 31st March, 2010.

"We are sitting on surplus liquidity at present, lending at eight per cent would make more sense than parking the funds in reverse repo, which will fetch us only about 3-3.5 per cent. We will review the need for extending the scheme further based on our liquidity position," said Mr R. Sridharan, Managing Director and Group Executive (Associates and Subsidiaries), SBI.

The bank had recently re-extended its teaser loan scheme till June 2010.

SBI has experienced an improvement in its NIM at 2.96% during the quarter ended March 31, 2010, against 2.39 per cent during the corresponding period last year.

Sridharan said that the home loan scheme had not brought any deleterious effect on the NIM of the bank while"it has only had a positive impact on our margins," he added.

The home loan segment has shown a growth of 32% as on 31st March, 2010.