NEW DELHI: Despite money supply tightening by RBI in its credit policy, the country\'s largest lender SBI has extended its special home loan scheme by two months till June 30. However, ICICI Bank allowed the product to expire on Friday. ''This scheme is very popular with our customers. As far as liquidity is good, we can continue with this scheme,\" an SBI official said. The scheme was to expire on Friday.
An ICICI spokesperson, however, said, ''We have decided not to extend the teaser rates.\" HDFC\'s teaser rate scheme was also to expire on Friday, but the lending institution has not taken a final view on the issue. The contrary stand by two leading lenders comes at a time when the government has said these schemes are a matter of regulatory concern and may impact financial stability of the lenders.
Teaser rate scheme provides concessional home loans to borrowers in the initial years, after which interest rates increase to align with prevailing market rates. Experts believe that there could be default on these home loans, if borrowers are not aware about the higher interest rate structure in the subsequent years.
While SBI has retained the rates for the first three years, the rate for fourth year onwards has been slightly reduced. For the first year, the loan would carry 8% interest rate and for the second and third year it would attract 9%. From the fourth year onwards, loans up to Rs 50 lakh will be charged 9.25% interest rate, while fatter loans will carry 9.75% rate. Currently, the scheme carries 10% interest rate from the fourth year onwards. ICICI Bank had extended the teaser rate for home loans till April-end. ICICI\'s teaser plan offered home loans at 8.25% for two years and existing floating rate thereafter.
Steel tycoon LN Mittal and two other non executive directors — Anupam Puri and Marti Subrahmanyam— will cease to be on its board effective May 3, 2010. Besides, the bank has approved a proposal for the appointment of Rajiv Sabharwal as its whole time director.
News From: http://www.7StarNews.com
Friday, April 30, 2010
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