Now days most of the young generation owns a house at the age of 25. This has become possible due to increase in disposable income. Today a well qualified working individual with a multi-national company gets salary in lakhs thus they are in much better position in comparison to their parents. Also, now days banks have made their loan terms and conditions easy which has made possible for these youngsters with high income to take loans for buying car, home, or even for pursuing higher education.
Therefore banks whether public sector or private banks are always in chase of new customers. State Bank of India, country’s largest lender apart from chasing new customers, is sighting on existing customers in order to offer those second home loans. Bank is doing this to grow its retail portfolio.
Besides corporate sector employees, after planning commission there has been substantial jump in the pay of employees working in the Government (Central and States), as a result banks are trying to woo existing customers with good track record with an offer of a second home loan. SBI is also encouraging its employees to take a second home loan.
SBI is trying to woo its existing borrowers for second home loans as for investment purpose.
According to bank figures, 96 percent of its home loan borrowers are first-time borrowers.
A senior official said, “We know that customers' income is rising. Hence, we look at their Equated Monthly Installment to Net Monthly Income ratio. If the higher income is sufficient to cover the second home loan, we would make the offer without any hesitation. We don't look at the value of the property, but the customers' capacity to repay his/her loan.”
For this fiscal SBI is aiming to achieve 32 per cent year-on-year growth in its home loan portfolio. It is planning to distribute Rs 22,000 crore (Rs 17,130 crore in FY2010).
As per bank data in the first two months of the current financial year, the home loan portfolio have grown by approximately Rs 2,800 crore, from Rs 71,193 crore as on March 31, 2010 to around Rs 74,000 crore.
Along with sourcing customers, sanctioning and disbursing loans, SBI is also focusing on follow-up with customers in cases where they fail in their mortgage payments.
The bank has tied-up with SBI Cards which has expertise in soft recovery. The follow-up involves contacting customers on telephone, reminding them about the delay in payment, and reverting to the bank with their response.
The bank is also working on increasing the capacity of its 116 retail loan processing centers so that they can process loan application faster.
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