NEWS & ADVICE : HOME LOANS
Teaser loans might end soon
By Joseph Samson
Nov 29, 2010
Print    Email    RSS   

Teaser loans may soon evanish from the lending scenario of the Indian banking sector following the cautious approach being adopted by banks in loan disbursal mechanism.

With some banks agreeing to RBI's stand and putting off these loans, others have opted to wait and watch the proceedings.

RBI, in the recent monetary policy review raised provisioning on teaser loans as a discouraging step towards the continual of such loans. The provisioning has been increased to 2% from 0.4% earlier. Also all home loans have been given an upper ceiling of 80% of the value of property.

The scheme has been pulled off by public sector lender, Indian Bank. We have withdrawn the earlier scheme and introduced a new festival scheme which will offer home loans at 8.5 per cent fixed for the first five years and floating thereafter in order to avoid any sort of confusion in the minds of consumers," said Mr T. M. Bhasin, Chairman and Managing Director, Indian Bank.

Punjab National Bank has however opted to wait and watch the fate of these schemes, suggested Chairman and Managing Director, Mr K.R. Kamath. "We launched the scheme as a part of our festival bonanza for a brief period (August 1 - December 31); however, we are not aggressively pushing such loans at present. We plan to wait for the final guidelines from the central bank regarding such loans," Mr Kamath said.

SBI however is not in agreement with RBI in this regard. The chairman of the bank was recently found quoting the schemes as "best product and the most sought-after" in the market.

"Typically, a few percentage points difference in interest rates hardly determine the purchasing decision of a customer. This is more to do with the property prices, however, it will be difficult for us to withdraw the scheme if other key players do not do so," said Ms Renu Sud Karnad, Managing Director, HDFC Ltd.


 


(Comments Posted : 0) Post Your Comments
Show All Comments
COMPARE QUICKLY
 Select a product:
 

CALCULATE QUICKLY
 Select a product:
 

EDITORS' PICKS
This is how a bank lends money
Evaluate Hidden costs before buying a house
Choose right repayment plan for home loans
Carnival of Indian Personal Finance Blogs #4
Your EMIs may help you to reduce your tax...


PINJORE: CaℒL Giℛℒs In PiNjOrE 09915787550...
PINJORE: CaℒL Giℛℒ In PiNjOrE 09915787550...
how to gate my home loan certificate

NEWS THIS WEEK
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