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The prospective homebuyers, who are looking to cobble together funds to buy an attractive property, now have every reason to cheer.
The country’s largest lender State Bank of India on Friday decided to extend its 8 per cent home loan scheme till March 31, 2010, just a day before it was due to expire. The move is sure to further intensify the already heated competition in the home loan market.
In the past few days banks like Axis Bank and Bank of Rajasthan have launched special scheme for home loan borrowers. Axis Bank came out with a special 8 per cent scheme for the first year and Bank of Rajasthan too dropped home loan rates to 7.5 per cent w.e.f. from November 9 and Punjab National Bank extended its 8.5 per cent scheme till December 31.
The bank, which offers the special scheme under ‘My Home Campaign’, gives 8 per cent fixed interest rate for 5 years for loans up to Rs 5 lakh, with a maximum tenure of 10 years.
These are clear signs of banks renewing focus on the growing home loan market in the country.
With low credit off-take worrying the banking industry, the banks’ continued aggression in the retail space is not surprising especially in the absence of signs of strong demand from the corporates.
Credit off-take dropped to single digits recording 9.6 per cent growth as on October 23. In fact, both the disappointing credit growth numbers and SBI’s move has already got other players thinking of extending their schemes too.
“Such schemes should be continued as it is not a time to withdraw schemes,” said MV Nair, chairman and MD of Union Bank of India.
SBI’s aggression may also force bigger private sector players to relook at their strategy for the fear of losing market share. The customers however are all smiles as the party continues.
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