The largest lender of the country, State Bank of India has been questioned since quite some time now regarding its special home loan scheme also called teaser loans.

The teaser loans have come as an affordable source of lending for the common man. These loans offer 8.5% interest in the first year followed by 9% in the second and third years. From the fourth year onwards, the interest would be on floating basis depending on the prevailing rates then.

The EMI which borrowers need to pay from the fourth year onwards has been questioned by peers in the banking sector and then by the regulator, Reserve Bank of India too. Inspite of the fact that bank officials have said that the interest from fourth year onwards will not be a significant rise over the previous year rates, the questionings still pursue.

Even after facing so much resentment, the country's largest lender has continued offering the scheme to customers till now. "We are clearly mentioning what the terms are. There is no opacity as is mentioned in the Economic Survey," said SBI chairman, O P Bhatt.

Officials have said that strict adherence to eligibility norms is followed by the bank before sanctioning the loan. So far Bhatt has strongly defended his bank and the scheme against all questions and oppositions. However, will the scheme be extended beyond March 31 after Bhatt retires from his post is still a question.