SBI to introduce separate prime lending rate for housing loans

By Our Banking Bureau | 13 Feb 2003

Mumbai: State Bank of India (SBI) will soon be introducing a separate prime lending rate (PLR) for housing loans.

This is expected to provide the bank the flexibility to revise the benchmark rate for housing finance. Currently, the benchmark rate is the bank’s MTLR (medium-term lending rate). The housing PLR is also expected to enable the borrowers who opt for floating rates to get the benefit of falling rates.

“We are looking at passing on the benefits to our existing and old home loan borrowers. The housing PLR proposal has been taken to the board and it is being consided,” says M Venkatachalam, managing director, SBI.

Housing finance forms a major chunk of SBI’s personal loans portfolio. For this financial year the bank had targeted disbursements of Rs 7,000 crore through its personal loans, of which housing finance alone is expected to contribute up to Rs 4,500 crore. As on 31 December 2002, the bank had around Rs 3,000 crore outstanding with respect to housing loans.