Although in its monetary policy review the Reserve Bank of India has clearly signaled exit from its year-long accommodative monetary policy, still the major public and private sector banks appear to continue with their cheaper home loan schemes for some more time.
Country’s second largest lender, Punjab National Bank has extended its ‘Festival Bonanza Offer-2009’ for housing and car loans up to December 31, 2009. Also country’s largest lender, State Bank of India possibly continues its special home loan scheme offered at an interest rate of 8% starting from Rs 5 lakh. Although bank has not said anything on extension of the tenure of the scheme, it is believed that the scheme will continue beyond November 7, as it was the deadline given by the SBI.
An anonymous bank official told ET that bank’s home loan sector has grown by 30% at Rs 8,300 crore during the first half of the current financial year. While the bank has projected a growth of 33-34% by the end of the current financial year, according to which the home loan segment should grow by Rs 18,000 crore by the fiscal-end. Home loan cover 12-13% of the entire loan book of the bank.
As per its festival offer, PNB is extending housing loans up to Rs 30 lakh at a discounted interest rate of 8.50% per annum (fixed) for first three years and 2-2.5% below BPLR in subsequent years of loan tenure under floating option. Apart from this, the bank is also offering complete waiver of processing fee and documentation charges on housing loans up to Rs 30 lakh. Even the margin has been reduced to 15% on housing loans up to Rs 20 lakh .
The bank has also announced cut in the interest rate on car loans by 50 basis points along with relaxation in processing fee & documentation charges.
The NIM has been affected due to special home loan scheme, but bank’s main concern was about the fact that there was droopiness in credit pick-up during the first half. Moreover bank’s main focus is on putting more funds in those lending schemes which are getting popular day by day and home loan is one of them. A SBI official pointed out that there is increase in interest in home loan market.
On the other hand Axis Bank, the third largest private sector bank is aggressively promoting its home loan, which it is offering at an interest rate of 8% for the first year. And from the second year onwards, bank will charge floating rate of interest based on the bank’s mortgage reference rate. As per current MRR, the rate for the second year and after that will be 8.75% for loan amounts up to Rs 30 lakh and 9.25% for amounts above that.
Axis Bank is organizing ‘Home for All’ expos in major cities. In these expos bank will give on-spot approval and wave loan processing fees for prospective buyers who will be applying for loan during the expos. The expo is the result of tremendous success achieved in a similar event organized last year. In the expos there will be a showcase of wide array of properties, across price points (Rs 5 lakh to Rs 5 crore) and category of properties (site, flats, houses and villas). The first expo will be start in Bengaluru from November 6, 2009.
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