The State Bank of India (SBI) - India's largest lender - has extended the deadline of its existing special scheme for home loan and auto loan from April 30 to September 30 in order to attract more customers.
The bank has also announced to top-up home loans at 8% interest rate for the first year that to be disbursed by the end of September this year. With this, SBI has aimed to lend Rs 1,500 crore per month in home loan segment.
In February, the bank announced a special home loan scheme in which it offered loans at 8% interest rate for only the first yea, and thereafter the interest rate would be revised to the prevailing rates.
Similarly, it offered car loan at a concession of 10% for the first year and under this scheme, SBI financed 20,000 cars in a just two-month period.
This move of SBI seems to be successful as since the launching of this attractive scheme, the largest public sector bank has sanctioned nearly Rs 2,360 crore to new home loan customers.
It was also beneficial for borrowers of other banks who switched their home loans to SBI. As a result, SBI made others to do enough exercise to bind their customers.
The Housing Development Finance Corporation (HDFC), the largest home loan lender, had raised the prepayment charges from 2% to 3%.
The move of SBI to introduce the special scheme had come in the wake of Reserve Bank of India (RBI)’s appeal to cut the loan rates following several rounds of cut in its Benchmark Prime Lending Rate (BPLR), Cash Reserve Ratio (CRR), Repo Rate and Statuary Lending Rate (SLR).
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