SBI slashes loan processing fee by 50 per cent
17 October 2012
The State Bank of India (SBI), hoping to cash in on the festival season, has slashed its processing fee on home and auto loans by 50 per cent for loans taken out between 17 October and 31 December 2012.
Following the reduction in processing fee, SBI will charge a minimum of Rs1,000 and a maximum of Rs5,000 on home loans. The country's largest lender already offers the cheapest home loans, having reduced the interest rates on such loans in August. It now offers the cheapest home loans among all banks. SBI now offers loans of up to Rs30 lakh at 10 per cent and loans above Rs30 lakh at 10.15 per cent.
On car loans, SBI said it would charge a minimum of Rs510 and a maximum of Rs5,100 as processing fee.
Earlier, several public sector banks had announced complete waiver of processing fees for a limited period. Also, banks, including Punjab National Bank, Syndicate Bank and Vijaya Bank, have lately floated their special schemes to cash in on the festival demand.
Private banks too have announced innovative schemes to attract customers.
More such festival offers are expected on the back of ample availability of liquidity coupled with subdued growth in corporate lending.
However, private banks like HDFC Bank, Axis Bank and ICICI Bank have so far not announced any reduction in processing fees. Coupled with the Reserve Bank of India's ban on charging pre-payment penalty in case a borrower shifts from one lender to another, this could hurt them.