With base rate coming into effect from July it an end for teaser loan schemes. The banks had introduced these schemes last year for home loan as well as car loans in which the customers were given loans at rates as low as 8%. The teaser loans were given below the BPLR.
The country’s biggest lender State Bank of India had started the teaser loan scheme. It launched these special loans in February this year. Initially, it offered special home loan scheme and followed it by special scheme for car loans too.
Other public sector banks followed suit and launched these special schemes. Though all other banks have withdrawn the scheme, SBI has increased it till April.
A leading SBI official said, “SBI’s schemes were a response to the excess liquidity that the bank had and a response to the unusual economic events that the country is going through. The new guidelines certainly have no room for these schemes or any Diwali or Dussera schemes as the rates will have to be passed on to the existing pool of the bank’s customers”.
But with effect from 1st July 2010, the base rate system is set to kick in. The Banking Codes and Standards Board of India (BCSBI), supported by the RBI had obtained numerous complaints from the clients about these teaser loans that these loans are only for the benefit of the new customers.
A top official from the BCSBI said, “Banks can now have schemes only if they pass on the benefits to all the customers, which is very unlikely”.