State Bank of India (SBI), the country’s largest lender, may extend its teaser home loan scheme, though a final decision will be taken at its ALM (asset-liability management) committee meeting later this month. The concessional home loan scheme is due to expire on September 30.
“Our home loan scheme has been immensely successful, and why should we not continue with it?” SBI Managing Director S K Bhattacharyya said on the sidelines of a banking event organised by the Federation of Indian Chambers of Commerce and Industry here on Monday.
“It is a good scheme. We have overtaken all others in home loans. Till now, we have not taken any decision on extending the scheme. The final decision will be taken at the ALM meeting in September,” he further said.
The scheme was originally supposed to end by April 30, but was extended till June, and then again till September, owing to the huge demand.
Under the scheme, for the first year, home loans carry an eight per cent interest rate, which rises to nine per cent in second and third years.
From the fourth year onwards, home loans up to Rs 50 lakh will be charged 9.25 per cent, while higher loans will be charged 9.75 per cent.
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The bank had fixed its base rate, the minimum lending rate, at 7.5 per cent.
Bhattacharyya said credit demand was good, particularly in sectors like power.
PCR 70% by Sept 2011
SBI expected to meet the provision coverage ratio (PCR) of 70 per cent by September 2011. At present it is about 59.5 per cent.
“We will reach the 70 per cent target of PCR by September 2011. That is the target we have given,” Bhattacharyya said.
Rights issue
SBI was also pushing for rights issue in the present financial year.
“We are trying. We have written to the government on the rights issue, but everything depends on the government,” Bhattacharyya said on being asked if the rights issue would happen this year. The government holds a 59.4 per cent stake in SBI.
The bank expects 20 per cent of its net income to come from international operations in the next two years.
At present, the bank’s international operations account for about 12 per cent of the bank’s net income.