The State Bank of India (SBI), the country's largest lender, today announced a scheme under which it will keep interest rates on new home loans unchanged at eight per cent for a period of one year.

SBI has introduced a scheme - SBI Lifestyle loan - for its existing customers, under which they can avail eight per cent interest rate for a period of one year.

This facility would, however, be limited to 10 per cent of their home loan exposures and up to a maximum of Rs5 lakh, an SBI release said.

The eight per cent interest rate scheme will be made available to customers who have taken loans during the period 2 February to 30 April  2009, the release said.

SBI said it would revert to the pre-freeze interest rates after the one-year period.

Existing borrowers under the two home loan schemes - loans up to Rs5 lakh and Rs5-20-lakh - would also be offered the eight per cent interest scheme for a period of one year, the bank said.

SBI also introduced a new package for SME borrowers - SME Care - which offers an additional working capital facility of 20 per cent of the fund based limits to customers, the release said.

"The loan will be given to take care of inventories of raw materials, finished goods as also delayed payments from their buyers in the current downturn at an interest rate of 8 per cent," SBI said.

The bank also introduced SME Help - under which term loans will be offered for purchase of fixed assets, including generator sets, with concessionary interest rate of eight per cent for the first year, the bank said.

Both the loans will be repayable in one year, it added.