The Economic Times
English EditionEnglish Editionहिन्दी
| E-Paper
Search
+

    SBI to charge processing fees for home loans

    Story outline

    • The decision comes on the heels of the bank facing a sharp dip in its interest income after the RBI lowered rates
    • SBI, in an internal circular, said, 'the full waiver of consolidated processing fee' offered during the festival period for loan proposals sourced up to December 31, 2019 is withdrawn
    (File photo)
    ET Calculator Banner
    (This story originally appeared in on Oct 11, 2019)
    BENGALURU: SBI will start charging processing fees for home loan borrowers, top-up plans, and loans to corporates and builders. This decision comes on the heels of the bank facing a sharp dip in its interest income after the RBI lowered rates.

    SBI, in an internal circular, said, "the full waiver of consolidated processing fee" offered during the festival period for loan proposals sourced up to December 31, 2019 is withdrawn. "Waiver will continue for proposals sourced up to October 15, 2019," SBI said.

    "On July 1, 2019, SBI linked its lending rate to the benchmark repo rate. Before this, SBI was offering the lowest rate in the market. After the decision to link, the rates came down sharply," a source said.

    On July 1, SBI had launched a software for automatically pegging home loans to the dynamic moving rate. It was rolled back on August 1, 2019. Following internal discussions that other charges should be levied to compensate for the low loan rate, SBI again rolled out its lending software on October 1 (in essence pegging loans to the benchmark rate).

    Others such as prepayment charges, Central Registry of Securitisation Asset Reconstruction & Security Interest registration fee might be increased later. "Processing fee would be at around 0.4%. And would be within the 10,000-30,000 (minimum-maximum) range for individual borrowers. For builders, a flat charge of Rs 5,000 has been reintroduced," sources said.
    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    9 Comments on this Story

    PN 411 days ago
    switch to Central Bank of India they have lowest interest rates and No processing fees nor prepayment charges
    Srinivasan Vedantam412 days ago
    once by merger and consolidation no more free lunch. Banks will enjoy depositor money at low cost for write off corporate loans and subsidized car loans for rich . Pure Robinhood in reverse. subsidize rich from poor
    Debashish Dutta413 days ago
    another way by big banks to loot small home loan borrowers
    The Economic Times