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Shobha Kannan

Kolkata, Nov. 3 State Bank of India will take a call on whether or not to continue with its special home loan (SBI My Home Campaign) scheme at a meeting on November 5, according to its Chief General Manager, Personal Banking, Mr P. Nandakumaran.

To facilitate home buying during the festival season, the bank had launched the three-month long scheme on August 8. “The three-month period is coming to an end on November 8. We have not taken a decision on whether to continue with the scheme or to discontinue it. We are yet to receive a formal approval from the management,” Mr Nandakumaran told Business Line. Under the scheme, loans up to Rs 50 lakh and tenure of 25 years were offered at 8 per cent interest rate during the first year and 8.5 per cent fixed during the second and third years. After three years, interest rate would be calculated 2.75 per cent below SBAR (for floating rate) and 1.25 per cent below SBAR with a reset frequency of five years. For loans above Rs 50 lakh, the interest rate would be 8 per cent for first year and 9 per cent for the second and third years.

Since the launch of the scheme, SBI witnessed a 50 per cent increase in average home loan sanctions, from 14,400 loans sanctioned every month in February 2009 to 22,000 in September 2009. The bank’s home loan portfolio stands at Rs 62,338 crore as of end-September 2009, a growth of 23 per cent over the same period a year ago and it happens to be the No. 1 in market share, as well as in total outstandings.

“There is a lot of demand from individual borrowers as well as the real estate industry for further continuation of the scheme. We are however, yet to take a call on it,” Mr Nandakumaran said.

In anticipation of a possible discontinuation of the special home loan scheme, the SBI Bengal Circle is organising a three-day home loan fair — SBI Home Loan Mahotsav. The bank is hopeful of garnering loan proposals of about Rs 300 crore during the fair, which started on Tuesday. “The existing scheme is valid till November 8, and we are not sure about the further continuation of the scheme so we hope to generate loan proposals during this three-day home loan fair,” said Mr Jayanta Kumar Sinha, Chief General Manager, SBI, Bengal Circle.

Backed by the scheme, SBI, Bengal Circle, Mr Sinha said, disbursed about Rs 440 crore during the first half of this fiscal as on September 2009, against Rs 260 crore during the same period last year, a growth of about 70 per cent. “We have waived the processing fee and reduced the margin money to 10 per cent (20 per cent in general) provided the proposed property is the first house of the applicant,” Mr Sinha said.

More Stories on : Housing Finance | Public Sector Banks | State Bank of India

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