Although many banks have withdrawn their teaser home loan rates but there is a good news that State Bank of India (SBI), the country’s largest lender will continue to offer teaser home loan rates beyond March 31. However formal announcement is yet to come.
As the lending and property rates are going to move up SBI plan as given more room to new home loan borrowers.
According to industry sources, the banking major decision might prompt other lenders to follow suit.
A senior SBI official claimed that the special home loan rate has helped in growth of its retail lending book. “There is demand from the field offices (circles) to continue with this offer beyond March, for better credit growth in 2010-11.”
“But the final decision rests with the corporate centre, which will look into the cost and liquidity conditions.”
A senior official in a housing finance company, however, had reservations. “Giving loans at 8 per cent is fine. But to keep it fixed for another year might be quite difficult.”
“With the Reserve Bank of India’s recent hike in repo and reverse repo rates by 25 basis points and an indication of further tightening, interest rates are expected to go up by 100-150 basis points in the next 12 months. Lower lending rates will put pressure on any finance company’s balance sheet,” he added.
According to some market analysts the bank is in a position to lend at these rates as it has a reserve surplus of close to Rs 40,000 crore.
Earlier when SBI had launched its teaser loan products, HDFC Chairman Deepak Parekh had called it a ‘gimmick’. Soon after that, in December, HDFC launched its fixed-cum-floating rate product.
In January 2009, SBI started the rate war, when it offered a fixed rate of 8 per cent for the first year. At that time bank launched two home loan products - SBI Easy Home Loan and SBI Advantage Home Loan.
Under the former scheme bank offered loan up to Rs 30 lakh, with rates of 8 per cent in the first year and 9 per cent in second and third years. At present the rates being offered at 8 per cent for the first year and 8.5 per cent for second and third years. From the fourth year onwards, customers have the option of choosing a floating rate at 2.75 per cent below the benchmark State Bank Advance Rate (SBAR). The “advantage loan” was for amounts above Rs 30 lakh.
Others such as HDFC and Axis Bank followed the SBI move. However Axis bank has withdrawn its two- year fixed rate in February, almost two months before schedule, citing high cost of funds. HDFC closed its offer on February 27, following an extension of two weeks over the February 14 deadline.
Tuesday, March 30, 2010
Wednesday, March 10, 2010
SBI and State Bank of Indore merger to complete by March
The merger of State Bank of Indore with country’s largest Bank, State Bank of India is likely to be completed by the end of this financial year.
This is the second merger after the State Bank of Saurashtra merger with SBI in August 2008.
After the completion of this merger five associate banks of the SBI will be left namely State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad.
The merger of State Bank of Indore with SBI has got the approval from both the central board of the bank as well as of government of India. In 2008-09 State Bank of Indore registered a net profit of Rs. 279 crore. SBI will have about 98 per cent stake in the bank.
In another development SBI indicating towards the lending rates has said the rates may rise from the second quarter of fiscal 2010-11. Chairman of SBI O P Bhatt said "So far as bank lending rates are concerned, I do not expect lending rates going up before May-June."
As recently RBI had raised its key rates in its policy review which will reduce the liquidity by Rs 36,000 crore from the monetary system.
SBI has also launched new scheme officers and other naval personnel called Defence Salary Package-Navy to offering services for free or with concessions.
The bank will be offering free drafts, free cheque book, free fund transfers and free ATM cards to officers and other navy personnel.
This is the second merger after the State Bank of Saurashtra merger with SBI in August 2008.
After the completion of this merger five associate banks of the SBI will be left namely State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad.
The merger of State Bank of Indore with SBI has got the approval from both the central board of the bank as well as of government of India. In 2008-09 State Bank of Indore registered a net profit of Rs. 279 crore. SBI will have about 98 per cent stake in the bank.
In another development SBI indicating towards the lending rates has said the rates may rise from the second quarter of fiscal 2010-11. Chairman of SBI O P Bhatt said "So far as bank lending rates are concerned, I do not expect lending rates going up before May-June."
As recently RBI had raised its key rates in its policy review which will reduce the liquidity by Rs 36,000 crore from the monetary system.
SBI has also launched new scheme officers and other naval personnel called Defence Salary Package-Navy to offering services for free or with concessions.
The bank will be offering free drafts, free cheque book, free fund transfers and free ATM cards to officers and other navy personnel.
Friday, February 26, 2010
SBI and TVS Motor Company inks MOU to offer inventory funds for dealers
A Memorandum of Understanding (MOU) was signed between State Bank of India (SBI) and TVS Motor Company. Under this agreement SBI will be providing funds to over 600 dealers of TVS Motor Company across the country, at attractive interest rates. This will help the dealers to increase their working capital, enhance vehicle stocks and consequently increase retail sales.
The bank is initiating inventory funding program by the “Supply Chain Finance Unit” and the program is available on an electronic platform for its approved clientele having features such as online fund transfers, online repayment, real time viewing of account status etc. With this system time of transactions between the bank and its clients will get reduced.
“This association with SBI, is in line with our overall strategic business plan towards strengthening the working capital of our dealers. Their access to such funds at attractive interest rates will help them in growing their dealership and offer better retail services to the customer” said President (Marketing), TVS Motor Company, H S Goindi.
Manas Kumar Nag Chief General Manager - SME (BU), State Bank of India said,
“Through the signing of an MOU with TVS Motor Company, State Bank of India has made inroads into the two wheeler industry and this is a realization of yet another accomplishment of our overall strategy to step up loan disbursals under Supply Chain Finance and garner a significant market share.”
The bank is initiating inventory funding program by the “Supply Chain Finance Unit” and the program is available on an electronic platform for its approved clientele having features such as online fund transfers, online repayment, real time viewing of account status etc. With this system time of transactions between the bank and its clients will get reduced.
“This association with SBI, is in line with our overall strategic business plan towards strengthening the working capital of our dealers. Their access to such funds at attractive interest rates will help them in growing their dealership and offer better retail services to the customer” said President (Marketing), TVS Motor Company, H S Goindi.
Manas Kumar Nag Chief General Manager - SME (BU), State Bank of India said,
“Through the signing of an MOU with TVS Motor Company, State Bank of India has made inroads into the two wheeler industry and this is a realization of yet another accomplishment of our overall strategy to step up loan disbursals under Supply Chain Finance and garner a significant market share.”
SBI Home/Car Loan Utsav 2010 to be held in Bangalore
State Bank of India (SBI) Bangalore circle will be organizing a three day SBI Home/Car Loan Utsav 2010 in the city, starting from February 19 to February 21. The event will be held at the bank’s head office on St. Mark’s Road.
The bank sources said at the utsav bank will offer spot loans to the borrowers at an interest rate of 8%. It added the customers can visit the stalls from 11 am to 7 pm on these three days and can choose from over 25,000 apartments. At utsav the customers can also select their favorite cars from a wide range available there.
The bank sources said at the utsav bank will offer spot loans to the borrowers at an interest rate of 8%. It added the customers can visit the stalls from 11 am to 7 pm on these three days and can choose from over 25,000 apartments. At utsav the customers can also select their favorite cars from a wide range available there.
Tuesday, February 9, 2010
SBI expands physical & technical network in North
The State Bank of India country’s largest public sector lender is expanding its physical and technological network by opening around 80 branches and 150 ATMs in the states of Jammu and Kashmir, Himachal Pradesh, Punjab and Haryana, and the Union Territory of Chandigarh in 2010-11.
At present, in the region the bank is having 875 branches and 32 processing centers.
Speaking on the sidelines of the launch of the off-line trading in Chandigarh Circle, Chief General Manager S K Sehgal told Business Standard the physical expansion will be mainly done in the under-banked regions, mostly in the hinterland. He added the bank has been taking up various awareness activities in the suburbs for the promotion of banking through technology that is via ‘business correspondents’ as it is more cost-effective.
He said that major physical expansion will be done in Himalaya (Leh and Drass) and this will help in catering the banking needs of defence personnel.
At present, in the region the bank is having 875 branches and 32 processing centers.
Speaking on the sidelines of the launch of the off-line trading in Chandigarh Circle, Chief General Manager S K Sehgal told Business Standard the physical expansion will be mainly done in the under-banked regions, mostly in the hinterland. He added the bank has been taking up various awareness activities in the suburbs for the promotion of banking through technology that is via ‘business correspondents’ as it is more cost-effective.
He said that major physical expansion will be done in Himalaya (Leh and Drass) and this will help in catering the banking needs of defence personnel.
Tuesday, January 19, 2010
SBI to install 6 lakh ‘point of sale terminals’ across country
State Bank of India (SBI) will be installing 6 lakh point of sale (PoS) terminals, across the country where shoppers can make payments by swiping their credit, debit or pre-paid cards.
At present there are 4.5 lakh PoS terminals in the country, out of which few belong to SBI.
Brajesh Varma, deputy general manager - new business, SBI said, “We have select PoS terminals installed in Manipal University and Indian Institute of Management - Ahmedabad, where the installations were done on request to benefit students. But right now most are at colleges and universities.”
The bank also have plans to start a separate company to take care of the card payment network, for this bank has short-listed 3-4 joint venture partners, including global players.
Varma informed, putting to rest speculation about SBI having shelved the plan, “The timeframe is yet to be finalized, but in two years we should have around 6 lakh merchant terminals”.
Sachin Khandelwal, senior general manager, ICICI Bank has been recently nominated the chairman of the Prepaid International Forum, said, it’s a huge target.
SBI will be installing large number of PoS terminals in smaller cities.
Verma stated, “Tier-I cities have already been covered by the private sector banks. We will build this network in Tier-II and Tier-III cities”.
According to plan, the joint venture partner name will be finalized in a couple of months and the company will start operations in 6-8 months.
The bank will not wait for the new company to be formed it will start installing terminals.
SBI’s plan is close to private sector ICICI Bank who is selling its network to First Data Corporation. It is expected the Reserve Bank of India will allow to cardholders to withdraw cash from PoS terminals installed with shopkeepers, mall stores, etc.
It is believed that SBI has changed the name it had initially decided on for the venture.
At present there are 4.5 lakh PoS terminals in the country, out of which few belong to SBI.
Brajesh Varma, deputy general manager - new business, SBI said, “We have select PoS terminals installed in Manipal University and Indian Institute of Management - Ahmedabad, where the installations were done on request to benefit students. But right now most are at colleges and universities.”
The bank also have plans to start a separate company to take care of the card payment network, for this bank has short-listed 3-4 joint venture partners, including global players.
Varma informed, putting to rest speculation about SBI having shelved the plan, “The timeframe is yet to be finalized, but in two years we should have around 6 lakh merchant terminals”.
Sachin Khandelwal, senior general manager, ICICI Bank has been recently nominated the chairman of the Prepaid International Forum, said, it’s a huge target.
SBI will be installing large number of PoS terminals in smaller cities.
Verma stated, “Tier-I cities have already been covered by the private sector banks. We will build this network in Tier-II and Tier-III cities”.
According to plan, the joint venture partner name will be finalized in a couple of months and the company will start operations in 6-8 months.
The bank will not wait for the new company to be formed it will start installing terminals.
SBI’s plan is close to private sector ICICI Bank who is selling its network to First Data Corporation. It is expected the Reserve Bank of India will allow to cardholders to withdraw cash from PoS terminals installed with shopkeepers, mall stores, etc.
It is believed that SBI has changed the name it had initially decided on for the venture.
Wednesday, January 6, 2010
SBI opened `SBI Sona Ghar' first exclusive gold banking outlet
The State Bank of India (SBI) first exclusive gold banking outlet `SBI Sona Ghar' in the country was inaugurated by the Minister of State for Human Resource Development D Purandeswari. Bank’s main branch is in Koti.
SBI Chief General Manager Shiva Kumar told the reporter banks’ launch of its new initiative is very timely as more and more people prefer to invest in gold. At new center gold deposit scheme will also be available.
He told through new centre pure gold coins and bars of 999.9 purity of 2 gm to 50 gm in a tamper-proof packaging will be sold. At new center gold deposit scheme will also be available.
The gold coins will be assay certified and are ideal for investment and individual and corporate gifting. At this outlet on bulk purchase of 500 grams and above special discounts will be given.
On deposit scheme 1 to 1.5 per cent interest in gold will be given for a period ranging from three to five years.
For instance on a 500 gram gold deposit for a period of three years, a customer will get 515 gram at the end of the term, he pointed out that the interest earned on the gold deposit is exempted from income tax and the value of gold has been exempted from wealth tax.
Even the appreciation on value of gold has been exempted from the capital gains tax.
Customers can take loan from any SBI branch by pledging gold deposit certificates. There is a provision for premature with drawl of the gold deposit, after an initial lock-in period of one year individual can with draw it.
He said, “We are targeting gold deposits of 500 kg in one year,'' and added that they will contact various temples and trusts to persuade them to deposit the gold which has been lying idle with them.
He informed bank aims to sell 100 kg gold every month. Purandeswari said as the price of gold is very high therefore it is the best investment option.
SBI Chief General Manager Shiva Kumar told the reporter banks’ launch of its new initiative is very timely as more and more people prefer to invest in gold. At new center gold deposit scheme will also be available.
He told through new centre pure gold coins and bars of 999.9 purity of 2 gm to 50 gm in a tamper-proof packaging will be sold. At new center gold deposit scheme will also be available.
The gold coins will be assay certified and are ideal for investment and individual and corporate gifting. At this outlet on bulk purchase of 500 grams and above special discounts will be given.
On deposit scheme 1 to 1.5 per cent interest in gold will be given for a period ranging from three to five years.
For instance on a 500 gram gold deposit for a period of three years, a customer will get 515 gram at the end of the term, he pointed out that the interest earned on the gold deposit is exempted from income tax and the value of gold has been exempted from wealth tax.
Even the appreciation on value of gold has been exempted from the capital gains tax.
Customers can take loan from any SBI branch by pledging gold deposit certificates. There is a provision for premature with drawl of the gold deposit, after an initial lock-in period of one year individual can with draw it.
He said, “We are targeting gold deposits of 500 kg in one year,'' and added that they will contact various temples and trusts to persuade them to deposit the gold which has been lying idle with them.
He informed bank aims to sell 100 kg gold every month. Purandeswari said as the price of gold is very high therefore it is the best investment option.
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