State Bank of India's home loan disbursements under its 'New happy home loan scheme' have grown at Rs1,500 crore monthly. This is about Rs400 crore more than the monthly average of Rs1,100 crore it did in the first two months since the scheme was announced.
"Till March we had done Rs 2,348 crore. Subsequently we are sanctioning Rs1,500 crore every month," P Nandakumaran, chief general manger, personal banking, reportedly said.
Banks which have made aggressive rate cuts have begun to reap the benefit of a revival in home loan demand. They have been able register a jump in their home loan disbursal in the last couple of months by attracting new home buyers as well as existing customers from the other banks and institutions. (See: Public sector banks woo customers with 'balance transfer' on home loans)
''About 40 per cent of the new customers that the bank is attracting are those migrating from other banks and institutions that have higher rate of interest. The home loan market is reviving with prices having corrected particularly in tier II and tier III cities. With signs of recovery in the economy, and with people being more certain of their jobs, so many enquiries are translating into sales,'' said Nandakumaran.
In the first week of February, SBI had announced an interest rate of 8 per cent for one year - the lowest so far among lenders. In the second year, the rates applicable will be the prevailing rates then.
The bank's move was to stimulate demand in the housing market at a time when many buyers postponed their purchasing decisions amid economic uncertainty and fear of job losses. The scheme has now been extended till September.
The bank also offers other schemes, which will be valid till the month-end. Under this, it offers a home loan between Rs5 and 20lakh at a fixed interest rate of 9.25 per cent a year for five years, after which rates will be re-set.