SBI chief sounds warning note on home loans

O P Bhatt, chairman, State Bank of India, the country's biggest lender, today cautioned against rising defaults on housing loans, and said this could lead to an asset bubble in the real estate sector.

"I am not saying there is any cause for alarm or they (NPAs in housing loans) are rising at a fast pace. As of now, there is no cause for concern but there is definitely a cause to think, plan and act," Bhatt said.

Non-performing assets are rising in the housing loan sector, he said, cautioning it could spill over to other sectors like commercial real estate and SMEs.

"Whenever economics like this come one way or the other ...There is a lagged effect which has certain consequences. It is prudent to take note and act," he said.

He said there was no constraint on loans for viable projects but pricing could be an issue.