Despite RBI’s strict warnings against teaser home loans, SBI has decided to extend its special home loan scheme by another month. The bank has chosen to extend the scheme up to June, an increase of another 2 months.
Other banks offering this scheme viz. ICICI Bank and HDFC Bank have decided to withdraw the scheme.
These were the only 3 banks that had decided to increase the duration of the scheme up to April 2010 while other banks had withdrawn it in March.
A top SBI official said, the bank has elected to increase the tenure of the scheme because of its popularity amongst customers as well as the strong liquidity situation of the bank.
Under the scheme, the customer is charged 8% interest rate during the initial year, and 9% for 2nd and 3rd years. After that, the rates would be floating.
With SBI introducing these teaser loans, HDFC Bank decided to restart the scheme. It was followed by ICICI Bank.
ICICI and HDFC Bank have opted to withdraw their schemes.
A spokesperson for ICICI Bank “We have no plans to extend the (special) home loan scheme”.
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