SBI may extend teaser rates again

The country’s largest lender State Bank of India may extend its popular teaser rate scheme for home loans, which is scheduled to expire on September 30. Under this scheme, borrowers get home loans at a cheaper rate for the first few years.

According to SBI managing director, Mr S.K. Bhattacharyya, “We are getting an overwhelming response for home loans. It is a very good scheme. We feel that the eight per cent rate of interest on home loans is viable and that’s why it has been continued.”

When asked if the scheme would be extend further after September 30, the SBI managing director retorted back: “Why should we not continue it?”

Mr Bhattacharyya was speaking on the sidelines of a programme organised by Ficci here on Monday.

Under the current terms and conditions, SBI charges eight per cent on all home loans for the first year. For the next two years, the interest rate is nine per cent. This means that on a Rs 20 lakh loan with a life of 20 years, your monthly instalment will work out to about Rs 16,700 for the first year. For the second year, it will Rs 17,995.

Mr Bhattacharyya, however, also made it clear that the final call would be taken by SBI’s ALCO meeting in the next few days.

He said that SBI plans to earn 20 per cent of its income from overseas operations by 2013.