In the race for retail loan growth, country’s largest lender State Bank of India has roped in its staff members to boost its already growing home loan portfolio and has sanctioned loans worth more than Rs 9,500 crore through staff referrals in over five months starting April. This is on top of a more than 50% growth in sanctions.
“The idea is to encourage our staff members to source home loans and for that they would get compensated as well. As many as 20,000 of our staff have referred at least one customer each. Since April to September 6, we have more than 50,000 new home loan account customers and Rs 9,696 crore has been the amount sourced,” B Sriram, managing director of national banking group told FE.
The addition to home loan portfolio comes on the back of an already strong growth in sanctions. Sriram said that home loan sanctions during April-August have grown by more than 50% year-on-year. SBI’s outstanding home loan disbursals till June-end was Rs 1.64 lakh crore, a growth of 13% year-on-year.
“In home loan, disbursals take time as it is staggered. So we will see more growth now,” said Sriram. Almost 60% of the bank’s retail book is made up of home loans.
In the run-up to the festival season, wherein every bank is targeting a higher growth in retail portfolio, SBI has reduced its auto loan rates by paring the spread over the base rate of 9.70% to 35 bps from 50 bps earlier.
Competitor HDFC Bank recently slashed its base rate by 35 bps that made its base rate lowest at 9.35%. Sriram said that the move is not worrisome as SBI’s retail loan rates are still lowest in the market. In auto loans, for purchase of new cars, SBI’s loan rate is 10.05% while HDFC Bank’s rate is 11.5-13.75% depending on the make of the car.
Sriram said that the bank expects to increase its retail loan growth during the festival season by its competitive interest rates. “We are looking into other products and thinking of new schemes as well,” he said.