Close on the heels of the Reserve Bank of India’s (RBI’s) policy action, India’s largest lender, State Bank of India, on June 9, 2017, announced a lowering of interest rates by 10 basis points, on home loans above Rs 75 lakhs.
The new rates are effective June 15, the bank said in a statement. For salaried women, the new rate will be 8.55 per cent while for others, it will be 8.60 per cent. “Taking a cue from the recent RBI reduction in risk weightage on home loans, SBI is passing on the benefit to its customers, by reducing its interest rates on home loans above Rs 75 lakhs,” MD (national banking) Rajnish Kumar said.
In the second bi-monthly monetary policy review announced on June 7, 2017, the RBI had reduced the LTV (loan-to-value) ratios, risk weights and standard asset provisioning rate, for individual housing loans for new customers. For housing loans above Rs 75 lakh, the central bank lowered the risk weight to 50 per cent, from the earlier 75 per cent. The standard asset provisions, or the amount of money to be set aside for every loan made, was brought down to 0.25 per cent from 0.40 per cent.
In April 2017, SBI had reduced its interest rates by 25 basis points.