SBI home loan rates may go up

By Our Banking Bureau | 05 Nov 2004

New Delhi: State Bank of India has no plans to hike its corporate lending rates in the short term, but said there was a chance of home loan rates going up after RBI tightened norms for the housing sector.

The bank also expects its lending to corporates growing by 18-19 per cent in the current fiscal.

"The interest rate will remain stable. Our prime lending rates will remain the same," SBI chairman AK Purwar said on the sidelines of 'Euromoney Conference' in New Delhi yesterday

This is despite the hike in repo rate by RBI by 0.25 per cent to 4.75 per cent in the busy season credit policy.

SBI lends money to corporates at about 10.25 per cent. The bank offers lower rates to blue-chip clients as well; the rate is higher than the benchmark PLR for others.

Asked whether home loan rates will go up, he said, "There is some chance." SBI's charges 7.75-8.25 per cent interest on home loans for 5-20 years.

"The interest outlook is stable in the short term. It is difficult to say about the interest rate outlook for the medium to long run because of the oil prices," he said referring to the surge in crude prices globally that has pushed up inflation in India.

Purwar said the bank's non-food credit will grow by 18-19 per cent in the current fiscal.