Teaser loans may continue for SBI after December too
By Joseph Samson
Dec 29, 2010
Print    Email    RSS   

All efforts of Reserve Bank of India to evanish teaser loan scheme from banking system would be soiled if the largest lender of the country actually brings to practice what it is planning to do. State Bank of India is planning to continue with the teaser home loan scheme even after December 31.

However, the next phase of these loans would price them slightly higher than the present interest rates charged by them. The reason behind may be attributed to the proposed rise in base rate of the banking major in 2011. The base rate of the bank currently stands at 7.6%.

"We are planning to extend our special home loans scheme beyond December 31 with few changes in the interest rates as we have to cover up our additional costs. The final decision on the same will be taken at a meeting on Thursday," said an SBI official.

Presently, SBI charges 8% interest for the first year of the loan, 9% for the second and third years and thereafter, the rates will be as per the prevailing floating rates in the market.

RBI had urged the closure of teaser loans and had also raised provisioning on them to 2%. Lenders like ICICI and HDFC Bank even closed this category of loans.

SBI however says that it will definitely assure the apex bank before continuing with the scheme. "We do take into account the repaying capacity of the borrower and at the same time we also make necessary provisions for these loans. We are going to assure RBI about this," the official said.


(Comments Posted : 1) Post Your Comments
1. Great information. I was desperately looking for this. This seems to be the first ever update on this issue. Thanks.
prasad tendulkar (Posted: Dec 29, 2010)
Show All Comments
 Select a product:

 Select a product:

Carnival of Indian Personal Finance Blogs #6
Can we claim tax benefits on home loan and...
Are fixed home loan rates actually...
Factors to Evaluate before opting for Home...
NRI Banking in India

Loan offer and we solve your financial problem....
PINJORE: CaℒL Giℛℒs In PiNjOrE 09915787550...
PINJORE: CaℒL Giℛℒ In PiNjOrE 09915787550...
how to gate my home loan certificate

Canara Bank earned a profit of 60%. Feb 6, 2015
New Branch of Laxmi Vilas bank at Vijayawada Jan 30, 2015
Home loan EMIs expected to drop down Jan 21, 2015
Corporation Bank received MSME banking excellence award 2014 Jan 19, 2015
Home loan rates set to fall, after reduction in repo rate Jan 16, 2015
News Archive