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Country's largest lender State Bank of India today reduced the interest rate on home loans above Rs 75 lakh by 15 basis points to grab market share in big ticket loans in large cities.
It has done away with the slab regime. It will offer uniform interest rate on home loans irrespective of the loan amount.
Earlier it had two slabs - upto Rs 75 lakh - 10.15% and Rs 75 lakh and above - 10.30%. Under revised regime, it will charge a uniform rate of 10.15% irrespective of loan amount.
It has retained an offer of five basis point discount to women borrowers. The woman has to be the sole applicant or the first of the co-applicants and also the sole or the first of the co-owners of the property.
Senior SBI executive said bank has revised rate and structure in response to competition. Few lenders were offering lower rates for loans in category of Rs 75 Lakh and above.
"We want to increase market share in loans with higher amounts. The market for it is in large cities. At present SBI books most of the home loans in size below Rs 30 lakh" official added.
Its competitors like ICICI Bank and HDFC are offering loans at rates around 10.15%. Home finance company HDFC charges between 10.15-10.65% for salaried and self employed professional subject to profile of prospective borrower. This is irrespective of loam amount,
This is not a festive offer but forms part of regular product offering. With a change in sentiment there is expectation of better pick up in loan growth during festive season which kicks-off from Ganesh Chaturthi and lasts till end of December, SBI official said.
SBI has posted a 15.6% year-on-year growth in home loan book at Rs 1,44,210 crore at end of June 2014. Its market share was about 25% in home loan market.
