Press Trust of India
Mumbai, Oct 4: SBI may have cut its base lending rate by 40 basis points to 9.3 per cent following RBI’s latest policy rate cut, but home loan customers of the top lender will have to pay up to 0.7 per cent above the base rate, and interest of as much as 10 per cent for their loans. Accordingly, the actual reduction in home loan rate will be a maximum of only 20 basis points, while a higher margin above the base rate will mean that customers will have to pay the same rate of interest for home loans above Rs 1 crore.
The rate for Maxgain home loans above Rs 1 crore – at 9.75 per cent for women – would come down by only 20 basis points, while for other customers it would actually remain unchanged at 10 per cent with effect from Monday despite a reduction of 40 basis points in base rate. For the CRE (Commercial Real Estate) Maxgain loans, SBI would charge as much as 65 basis points above base rate or 9.95 per cent for the women customers and 70 basis points above the base rate or 10 per cent for other customers.
The bank spokesperson was not immediately available for comments. However, bank officials tried to justify the increase in the markup over base rate, saying the decline in actual home loan rates has been 75 basis points since December 2013, as against a reduction in base rate by 70 basis points. They also said that the base rate for other lenders continues to be higher at 9.55 per cent, while in December 2013 also it was higher at 10.3 per cent as against SBI’s 10 per cent. Interestingly, state-owned SBI was among the first to announce a reduction in its rates after RBI surprised with a 50 basis points reduction in its policy rate on September 29 as it lowered its minimum lending rate or base rate by 40 basis points — the highest for any lender so far — from 9.7 per cent to 9.3 per cent with effect from October 5, that is from Monday.
