SBI cuts interest on home loans above Rs 75 lakh

Mumbai: Close on the heels of RBI's policy action, India's largest lender State Bank of India has lowered interest rates by 10 basis points on home loans above Rs 75 lakh.

The new rates are effective June 15, the bank said in a statement here today. For the salaried woman, the new rate will be 8.55 per cent while for others, it is 8.60 per cent.

"Taking a cue from the recent RBI reduction in risk weightage on home loans, SBI is passing on the benefit to its customers by reducing its interest rates on home loan above Rs 75 lakh," MD (national banking) Rajnish Kumar said.

In the second bi-monthly monetary policy review announced on June 7, RBI had reduced LTV (loan to value) ratios, risk weights and standard asset provisioning rate for individual housing loans for new customers.

For housing loans above Rs 75 lakh, the central bank lowered the risk weight to 50 per cent, from the earlier 75 per cent.

The standard asset provisions, or the amount of money to be set aside for every loan made, on home loans was brought down to 0.25 per cent from 0.40 per cent. In April this year, SBI had reduced its interest rates by 25 basis points.