After recording a handsome growth of 32 percent in the home loans advances last fiscal, the largest lender in the country State Bank of India is likely to experience a dip in the home loan growth in the present fiscal year.
Inflation is the main culprit, due to which there has been a drop in the demand for the home loans. In the current quarter alone, SBI hiked the base rate twice that made home loans dearer for the customers.
A SBI official said “Our home loan advances growth will be a shade lower than last year. The drop is because demand for home loans has come down. Inflation has impacted the demand. High real estate prices are rising; interest rates are also responsible for bringing down demand of home loans.”
Another factor that contributed significantly is the change in the pricing structure. The teaser loan scheme that was very popular amongst the customers in whom the bank charged 8% interest rate for the first year then 9% for the second year and floating rate thereafter, has lost its charm.
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