State Bank cuts home loan rates

Written by Banking Bureau | Kolkata, Sep 26 | Updated: Sep 27 2007, 06:24am hrs
The big daddy of commercial bank has joined the race to lower home loan rates. State Bank of India on Wednesday announced a cut in its home loan rates by 75 basis points, from 11.25% to 10.50%, under the garb of a loan mela that will run till October 7. It is also cutting rates on personal and car loans.

SBI now matches the offer from Housing Development & Finance Corp (HDFC), which had announced a special rate of 10.5% on Monday for floating rate loans applicable only to loans disbursed on or before October 31. HDFC's move was quickly followed by Central Bank of India and IDBI Bank which has gone for a 100 basis point cut.

We will be offering a concession of 75 basis points on our card rates for loans above Rs 5 lakh, with the effective rate coming to 10.50% from 11.25%, said A Mukand, the chief general manager of SBIs Bengal circle. The rate will apply to new loans as well as those taken over from other lenders.

The offer is part of SBIs Home Loan Mahotsav, which opens Thursday and will run till October 7 here.

Mukand said the scheme might get extended depending upon the interest rate scenario during the end of the loan season. We expect to disburse Rs 500 crore worth of home loans during this period," he said.

SBI had disbursedRs 70-80 crore during a similar loan mela held last year at this time on a much smaller scale,and a total of Rs 525 crore during the full year 2006-07.