Tag: LIC housing finance

SBI hikes base rate by 10 bps to 9.80%, still the lowest in the industry

Sep 20, 2013, ET Bureau.

MUMBAI: State Bank of India (SBI) has hiked lending rates wherein new borrowers will have to pay more as compared to existing borrowers. SBI hiked base rate by 10 basis points to 9.80% a day before the Reserve Bank of India’s new governor, Raghuram Rajan is slated to announce his first mid quarter policy statement.

Interestingly for the first time existing borrowers are spared from a steep hike. New home loan borrowers of SBI will have to pay 10.05% for home loans for loans upto Rs 30 lakhs while the existing home loan customers will be charged 10%. For home loans between Rs 30 lakhs to Rs 75 lakhs, new customers will be charged 10.30% while existing customers will be charged 10.20%.

SBI is the first government owned bank to raise rates after RBI started tightening liquidity to protect the rupee from weakening in mid July. Following this, SBI and HDFC Bank offers lowest lending rate at 9.80%.

The difference in rates between existing and new customers is mainly because the bank has hiked spread or mark-up on base rate for new customers. The bank has increase mark up for home loans upto Rs 30 lakhs from 25 bps to 30 bps while the mark up for loans between Rs 30 to Rs 75 lakhs is raised from 40 bps to 50 bps.

Officials from the bank said that the bank has raised rates since the cost of money has gone up in the recent weeks. On Thursday, SBI bank also announced a hike in retail deposits in the range of 25 to 100 basis points. The bank would offer 100 bps higher for 179 days and one-year deposit at 7.50%. Early this month, the bank had raised interest rates on short-term bulk deposits to 9% from 7.25%.

SBI has also raised spreads on base rate for corporate loans. Officials from the bank who did not want to be named said that mark-up on base rate for top rated corporate is raised by 15 bps to 105 bps.

Several private banks such as HDFC Bank and ICICI Bank had announced a hike in lending rates after RBI tighten liquidity to prevent rupee from weakening against dollar. Among others HDFC and LIC Housing Finance, the housing finance companies also raised lending rates.

Among PSU banks, Andhra Bank, Union Bank of India and Bank of India had rolled back the reduction in rates to 10.25% in recent weeks. These banks had cut rates at the instance of FM days before RBI began tightening liquidity.

LIC Housing launches home loan scheme for self-employed

29 Jan 2013, PTI.

CHANDIGARH: LIC Housing today said it is planning to roll out a new housing loan scheme for self- employed people wherein monthly loan repayment schedule might be tweaked to daily or quarterly.

“Other than the Equated Monthly Installments (EMIs) system (meant for service class), we are planning to have an arrangement for self employed category in such a manner that where money (housing loan installment) can be deposited (by borrower) on daily basis or quarterly basis,” LIC Housing Finance Director and Chief Executive V K Sharma told reporters here today.

The LIC promoted Housing Finance company will target wide variety of sectors including small businessmen traders, farmers, shopkeepers etc for this new housing loan facility, he said.

“We plan to launch this loan scheme next fiscal,” he said.

Stating that EMI repaying system was more skewed towards service class, he hoped that the new loan scheme would benefit self-employed people who faced innumerable problems in availing housing loan from financial institutions.

“The credit appraisal of self employed which is another issue is currently being looked into (by LIC Housing),” he said.

Currently, the LIC Housing Finance has just 15 per cent of total loan portfolio as self-employed customers.

In an effort to lend more to women, LIC Housing Finance launched woman-oriented home loan scheme ‘Bhagya Lakshmi’ on January 7 this year wherein interest rate will be 0.25 per cent lesser on home loans if property is in the name of a woman.

Sharma said that loan repayment record of women had been excellent which prompted it to extend loan facility at low rate to them.

“Based on our past data, you will be surprised to know if the house is in the name of lady then delinquency or default (in home loan) is virtually zero. Then we decided why not this (low interest rate) benefit be passed on to ladies,” he said, adding that women had been better in credit appraisal.

He said the company received a tremendous response to this scheme and in less than 20 days of scheme launch, it processed 3,084 cases across the country.

LIC Housing Finance has over 8 lakh customers comprising 2 lakh women customers.

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GiottoPress by Enrique Chavez