Banks in India have started increasing home loan rates for large borrowers
by 25 to 50 basis points. The increased rates are applicable to NRI
borrowers as well. Earlier, banks had only two slabs for home loans
-- up to Rs 30 lakh and above Rs 30 lakh. Some banks have now introduced
a third slab that covers borrowings over Rs 75 lakh. For instance, the
country's largest lender the State Bank of India (SBI) is charging 12.50%
for home loans of over Rs 75 lakh against 12.25% for loans between Rs
30 lakh to Rs 75 lakh and 11% for loans up to Rs 30 lakh. The new rates
have been made effective from last month.
"The asset and liability committee (ALCO) of the bank has decided
to introduce an additional amount tier for home loan borrowers considering
the fact that borrowers of these loans mainly are the high net worth
individuals (HNIs) and are in a position to pay the additional amount,"
an official in SBI said from Mumbai. He, however, added the higher rates
are applicable only in case the loan duration is between 15-25 years
and it would not be applicable for loans of shorter duration. A circular
in this regard has been sent to all the branches of SBI. The change
in slab would be applicable on all the schemes of floating rate home
loans. This is the second time since August that SBI has revised the
home loan rates. In fact, finance minister P Chidambaram had asked all
the bankers not to interfere with the priority sector home loan (loans
up to Rs 30 lakh), but there was no specific direction with regard to
loans beyond that.