Money & Banking

2.92 lakh people availed teaser rate home loans: SBI

PTI Davos | Updated on November 10, 2017 Published on January 30, 2011

Mr. O. P. Bhatt, Chairman, State Bank of India. - File photo SHASHI ASHIWAL   -  Businessline

Defending the teaser rate scheme, State Bank of India (SBI) Chairman Mr O P Bhatt on Sunday said that over 2.92 lakh borrowers availed themselves of the scheme to buy their dream homes.

“About 2.92 lakh people were given home loans at teaser rates (8 per cent or the prevailing rates) ... totalling about Rs 10,000 crore,” he said, while talking to reporters here on the sidelines of the 41st World Economic Forum (WEF) meeting.

Under the teaser rate scheme, banks provide credit at lower rates for first few years and subsequently raise the interest rates.

The Reserve Bank of India (RBI) has been raising concern about the teaser rate scheme fearing that it might increase home loan defaults in the times to come.

Taking cue from RBI, several other public and private sector lenders including ICICI Bank, HDFC and Punjab National Bank (PNB) have withdrawn their schemes, while SBI has extended its scheme until March 31, 2011.

On whether the SBI would continue the scheme beyond March 31, Mr Bhatt said his successor will take a view. Mr Bhatt is due to retire in March, 2011.

He also stressed that the scheme would not create any problem for the bank, as 80 per cent of the loans were given below Rs 10 lakh and the KYC (know your customer) norms were followed while sanctioning loans.

Ruling out any problem on account of teaser loan scheme in future, Mr Bhatt said, the non-performing assets in the home loan segment were very low.

He also recalled that the teaser loan scheme was started by the bank in consultation with the Indian Banks’ Association (IBA) as a stimulus to help the Indian industry to combat the impact of the global financial crisis.

The scheme, he added, did help the housing sector and also the other industry segments like cement, steel etc.

On his plans after retirement, Mr Bhatt, who heads the largest bank in the country, said he has some offers from the private sector but has not yet made up his mind.

Published on January 30, 2011

A letter from the Editor

Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!


Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.