Stating that the prices in housing sector have been stable in the last one year, State Bank of India’s (SBI) MD Rajnish Kumar told BTVi that this is the perfect time for home-buyers who were waiting for rates to fall. “I believe current rates are very competitive, attractive for buyers,” he said. “We have cut 1 year MCLR To 8.9%, effective November 1,” he further said. When asked about rate cut, he added that further rate cut will depend on multiple factors. State Bank of India (SBI), has cut its home loan rate to the lowest level in six years. The country’s largest public sector lender has cut its home loan rate to 9.1%. The rate cut comes as part of a festive scheme by SBI.
Under the new scheme, home loans for women, or loans with women as co-borrowers, will be available for 20bps above the benchmark rate. This implies a rate of 9.1%. A rate of 9.15% will be applicable for other borrowers. These rates will be valid for loans sanctioned in November and December this year, and where disbursement is taking place in a month. Adding to the good news, the bank will also waive off all processing fees. Last week, SBI reduced its benchmark rates by 15 basis points. ICICI Bank also reduced its benchmark rate by 10 basis points. The announcements come after repeated displeasure shown by the regulator for not passing on the benefits of cuts to borrowers and give a boost to the sagging economic growth.
Even after the introduction of the MCLR, the central bank continues to be concerned on the issue of transmission which was flagged by Governor Urjit Patel at his maiden policy review this month. In the monetary policy review in October, the MPC had noted that banks should find added impetus for better transmission by the recent downward adjustment in small savings rates.