SBI Has Ruled Out Dual Loan Rate

By | July 6, 2011

A recent press report said that State Bank of India has announced that it had no plans to take a cue from rival ICICI Bank and devise a dual rate home loan scheme.

Mr. Pratip Chaudhuri, chairman, SBI, said that the bank has no plans at present to introduce a dual rate home loan.

Reports said that under tighter provisioning norms introduced last November, banks have to set aside higher provisioning for teaser loans. It added saying that SBI had gained grabbed attention and market share in the home loan space on introducing the teaser home loan scheme which offered a low, fixed interest rate at 8 per cent in the initial years of the loan which later morphed into a floating rate at the prevailing market rate.

MR. Chaudri said that SBI’s current home loan product has been widely accepted and the bank had not seen any drop in demand despite higher interest rates. He said the bank was focusing on the introduction of simple products that its customers would easily understand.

He also said that it is easier for the sales force to explain the features, as the bank had come up with a uniform rate for car loans irrespective of the tenor or the amount.

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About Pradeep Yuvaraj

Pradeep Yuvaraj is a Co-Founder and Director at Finerva Financial Solutions Private Limited, a financial education company focused on personal finance education. He has penned over 250 articles relating to Personal Finance and clocked over 500 hours of educating individuals on managing personal finance. He is a serial entrepreneur and has been associated with 7 Start-ups. His entrepreneurial experience spans industries as varied as Education, Gas Engineering, Automobile Design, Software development and more recently a Pure play presentation design company. Prior to turning entrepreneur in 2005, he has worked for 3 of the top ten companies of the world - Shell, ExxonMobil and Total SA. This experience included handling Branch Operations, Channel Sales and Business Development across 5 states over a period of 8 years. He holds an MBA from Symbiosis and an Electronics Engineering Degree from the University of Pune.

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