SBI housing, auto loan rates cut

By Our Banking Bureau | 01 Oct 2003

Mumbai: State Bank of India (SBI) has decided to make housing loans and auto loans cheaper for its customers by 25-150 basis points from today. Apart from slashing interest rates on its retail loans, the bank has also introduced new tenure brackets in the housing segment.

The revised floating rate for home loans of up to five years is 7.75 per cent (8 per cent). SBI has introduced new brackets of five-15 years and 15-20 years. The rate for five-15 years will be 8.25 per cent (8.75 per cent) while that for 15-20 years has been revised to 8.50 per cent (9.25 per cent).

On a fixed basis, interest rates will be higher by 0.25 per cent than those offered on floating rates. Similarly, interest rates on auto loans have been reduced to 9.5 per cent from 11 per cent for tenure of up to three years and 10 per cent for three-seven years.

SBI has been experiencing a slowdown in its rate of growth in housing in some metros. In large part, this has been due to the ruthlessly competitive environment in retail financing, with banks undercutting each other to capture a larger market share in the wake of little or no credit pick-up in industry segments.