SBI said that home loan rates offered are 'lowest in the industry'.
The country's largest lender State Bank of Bank or SBI announced a reduction in interest rate on new home loans above Rs 75 lakh. SBI home loans above Rs 75 lakhs be cheaper by 10 basis points or 0.1 per cent with effective from June 15. The revised interest rates for salaried women borrowers will be 8.55 per cent. For others, the rate of interest will be 8.60 per cent, India's largest home loan provider said. This is the second reduction in interest rates in two months, SBI said, adding that home loan rates offered are "lowest in the industry".
For new home loans for up to Rs 30 lakh, SBI had last month reduced interest rate to 8.35 per cent.
"Taking a cue from the recent RBI reduction in risk weightage on home loans, SBI is passing on the benefit to its customers by reducing its interest rates on home loan above Rs. 75 lakh," said Rajnish Kumar, managing director for National Banking at SBI.
"SBI has always been at the forefront in keeping the customers benefit first. This interest rate reduction will help home buyers come closer to their dream home."
Other banks are expected follow SBI's move in cutting home loan rates. To provide a fillip to the housing sector, the Reserve Bank of India (RBI) earlier this week relaxed the capital requirement norms for banks to issue home loans. The RBI has reduced the risk weight on individual housing loans. With lower risk weights, a bank has to set aside less capital, thus increasing the lender's ability to lend.
SBI is the largest commercial bank in India in terms of assets, deposits, branches, customers and employees.