Within days of Reserve Bank of India’s reduction in capital requirement on big ticket home loans, State Bank of India, the country’s largest bank lowered interest rate on loans above INR 75 lacs. Home loan rates have been lowered by 10 basis points by the bank for loans above INR 75 lacs to 8.55 percent for women and 8.60 percent for others. The revised rates will be effective from June 15. Risk weightage on home loans have been lowered by RBI in its monetary policy from 75 bps to 50 bps and provision for standard assets from 40 bps to 25 bps.
“We have observed that delinquency is lowest in the home loan segment. We have reduced the SLR by 50 basis points as a part of the transition to 100 percent liquidity coverage ratio by January 2019. In the interim it will provide some liquidity to banks. Possibly these two measures together should bring some buoyancy to the home loans segment,” N S Vishwanathan, deputy governor RBI, told the media, reports ET Realty.
Interest rate will be cheaper by 3-4 basis points due to the 15 bps reduction in standard asset provisioning.