SBI to increase home loan rates by 0.5% by July 15

"We raised the PLR by 50 basis points so the rise (home loan rate) will not be more than that," SBI Chairman O P Bhatt told reporters here.     

The bank is still examining the market condition and by July 15 it will take a call on home loan rates, he said.     

SBI had increased its PLR by 50 basis points to 12.75 per cent last week. Following the hike in lending rates, the bank also increased deposits rates by up to 75 basis points for various maturities.     

 

The revised rate, if it is done, would be applicable to new home loan borrowers not on the existing one, he said.     

Yesterday, private sector player like HDFC, ICICI Bank increased home loans rate by 0.75 per cent.     

When asked about whether there is decline in fresh home loan borrowing, Bhatt said, the bank's April-May disbursal has in fact increased, compared to same period last year.     

There is, however, slowdown in the auto loan, he added. Bhatt said, SBI expects net interest margin in the range of 3 per cent, compared to 3.09 per cent in the previous year.     

Credit growth this year would moderate by 2-3 per cent but the bank aims advances to grow at 20-21 per cent.     

About profitability, he said less business would mean less profitability. Impact on volume would have some impact on profitability.