SBI lowers interest rates on home loans over Rs 75 Lakh

State Bank of India announced an interest rate cut of up to 10 basis points on home loans worth over Rs 75 lakh on June 9, 2017. The largest lender of the nation has cut down the interest rate on home loans from 8.65 per cent to 8.6 per cent, on an annual basis. Whereas, salaried women borrowers will be entitled to an even lower interest rate of 8.55 per cent.    
 
The revised interest rates, the second reduction in the current quarter, will be applicable from June 15 onward as communicated by the bank on Friday. SBI had brought down its interest rates by 25 basis points in the month of April, 2017. 
 
On June 7 2017, apex bank Reserve Bank of India had also cut down risk weight on home loans worth over Rs 75 lakh to 50 per cent, from 75 percent. The risk weight cut by the central bank was in sync with its decision to reduce standard asset provisioning, while raising the loan-to-value (LTV) ratio.  
  
By the end of fiscal 2017, State Bank of India had recorded a home loan book worth Rs 2.22 lakh crore, representing 16.6 per cent of its total loans. Loans worth up to Rs 75 lakh comprise about 80 per cent of SBI’s home loan book aggregate, with the rest 20 per cent comprising loans of higher value.     
 
On June 9 2017, the BSE Bankex closed flat at 26,820.28 level, up by 0.52 percent, with SBI also closing neutral at Rs 288.55 on the BSE. Whereas, BSE Sensex closed at 31,262.06 level, up by 0.16 per cent, in line with BSE S&P Bankex on June 9.