Reserve Bank of India (RBI) governor D Subbarao said on Tuesday the central bank would take action on teaser loans if its necessary. “If that is a concern, we will respond to that, I cannot answer it now,” the governor observed on the sidelines of the Ficci-IBA meet responding to a query on whether the regulator is worried about whether other banks will follow ICICI Bank in offering dual rate home loans. ?There are no concerns about teaser loans. We have not banned teaser loans,? said KC Chakrabarty, deputy governor, RBI when asked about whether the regulator was worried about teaser loans.
Last week ICICI Bank introduced two home loan products similar in some respect to teaser home loan schemes. Chanda Kochhar, managing director and CEO of ICICI Bank observed, ?We are near the peak of interest rate cycle but when that peak will come is difficult to say. There is no difference in the interest rates because the rate of interest rate is fixed today and it is not lower.? Kochhar added that the customer has an option for locking in to a fixed rate for one or two years depending on which ever option it goes. ?It is like any floating rate product,? she said.
Meanwhile, Pratip Chaudhuri, chairman, State Bank of India(SBI) said the bank had no plans to launch fixed-home loan rate product because the scheme that it ahd earlier had been termed as teaser loan. “The home loan product that we have currently is widely accepted and there is no dearth of demand,” the SBI chairman said. He observed that even the borrower understands that it’s the age of floating rates?rates will go up and down. “Our competitor banks who have launched fixed rate home loans ?they too have launched it for one or two years, subsequently they will also become variable.”