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Increase in home loan rates by next week: SBI

By Staff

New Delhi, Jul 1: Country's largest bank State Bank of India on Tuesday, July 1 said it is reviewing the home loan rates revision and expects to take a decision within a week.

''We are planning to raise interest rates on home loans within a week or 10 days time,'' Mr O P Bhatt, Chairman, SBI, said. The home loan rates revision will not be more than 50 basis points, he added. Mr Bhatt said he had not seen much of a decline in business due to costlier loans and tighter cash conditions, and expected growth of about 22 per cent in both deposits and loans in 2008-09.

''There has not been too much of an impact on business growth,'' he said. But there is a little reduction in home, auto, and personal loans, but in corporates, infrastructure and services, there is no decline.'' The home loan disbursement from the SBI during April-May this year has been higher against during the same period last year, he said.

The bank plans to add 2,000 branches during the current financial year out of which 1,000 are marked for semi-urban and rural areas.

On completing 202 years of operation, the bank today opened 101 branches across the country which were inaugurated by Finance Minister P Chidambaram.

Earlier, SBI announced a hike in its benchmark prime lending rate by 0.50 per cent to 12.75 per cent with effect from June 27, 2008.

This was due to the Reserve Bank move to raise the cash reserve ratio (CRR) and repo rate by 0.50 per cent each in a bid to rein in inflation.

The bank also aims to extend its banking services to 1,00,000 unbanked villages by 2010.


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