In what could be reckoned as a David versus Goliath fight, a Mumbai-based urban co-operative bank has thrown down the gauntlet to banking and housing finance giants on home loans. Mumbai-headquartered Punjab and Maharashtra Co-operative (PMC) Bank is offering home loans, especially to women, cheaper than those by its much larger rivals.

The 33-year-old urban co-operative bank (UCB) is offering home loans to women borrowers at rates ranging from 7.75 per cent to 8 per cent.

PMC Bank is charging women borrowers 7.75 per cent interest on home loans up to ₹25 lakh and 8 per cent on loans above ₹25 lakh and up to ₹70 lakh. UCBs cannot give home loans above ₹70 lakh.

In the case of male borrowers, PMC Bank is charging 8.25 per cent on home loans up to ₹25 lakh and 8.35 per cent for above ₹25 lakh and up to ₹70 lakh. Comparatively, banking behemoth SBI is charging salaried women borrowers 8.30 per cent and 8.35 per cent for non-salaried on home loans up to ₹30 lakh.

For loans above ₹30 lakh and up to ₹75 lakh, SBI charges women borrowers (salaried) 8.30-8.35 per cent and 8.45-8.50 per cent for non-salaried. SBI charges male borrowers 5 basis points more across the home loan slabs.

Share linking

A senior PMC Bank official said his bank has relaxed the share-linking requirement as the collateral is solid in the case of home loans. Under the share-linking requirement, which is typical of UCBs, a borrower is required to purchase the lender’s shares at the rate of 2.5 per cent of the secured loan amount and 5 per cent of the unsecured loan amount.

The official said as housing is a secured loan, depending on the loan amount the minimum and maximum value of the bank’s shares that a borrower needs to purchase has been capped at between ₹2,500 and ₹10,000, respectively.

“Our home loan product at competitive interest rates was launched a couple of months back. We are witnessing good traction in home loans,” said another official. .

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