SBI to extend its special loan rates

SBIIt seems that SBI will still have to deal with a few teaser loans as the bank is mulling to go on with its 8% happy loan scheme even after 31st March 2010 till July. But it needs to be noted that a formal announcement has yet to be made.

SBI chairperson Mr. O. P. Bhatt said that they still have time and will look into the situation after 31st March.

The slow and lethargic credit growth, which is still very much present in the country, is the main reason for this plan. As of now, even SBI is almost Rs. 50, 000 crore excess funds, which are supposed to be disbursed. It is being predicted that rate will continue till the base rate season arrives.

A SBI official informed that due to these teaser home loans, the bank has witnessed its growth of the retail lending book.

Many banks like ICICI, HDFC and Kotak Mahindra have withdrawn the teaser loan schemes, along with public sector banks like Union Bank of India as well as Canara Bank

But it should be noted that everyone is giving mixed reaction for this.

It was in February 2009, when SBI became the first bank to launch these special loan rates and soon more banks followed the suit. There can be a possibility that with SBI extending the scheme, other banks might also do the same.