SBI Interest Rates: India’s largest government bank bank SBI has given a big blow to the customers. The bank has increased the interest rates of home loan. State Bank of India has increased the interest rates by 25 basis points. The interest rate was earlier from 7.5 percent to 8.45 percent. It has now increased from 7.5 to 8.70 percent. The bank has announced to increase the interest rate of the upper band. This will make it expensive to take home for the common man. Taking home will be difficult
This increase will mostly affect those whose credit score is low. Because, the bank has increased the upper limit of its loan rates. Apart from SBI, Union Bank of India has also increased its rate and in the coming time the rest of the public sector lenders can also do this. However, these banks are increasing the interest rates at a time when the Reserve Bank of India has a steady reduction in the repo rate. Except for the previous meeting, this year RBI has constantly cut the repo rate.
In late July, SBI’s home loan rates were between 7.5% to 8.45%. Now after the change, new boyrs will have to pay an interest rate from 7.5% to 8.70%. At the same time, Union Bank of India has also increased its rate in July end from 7.35% to 7.45%. Both banks did not respond to the email sent on this increase. In comparison, private lenders such as HDFC Bank, ICICI Bank and Axis Banks start giving home loans from 7.90%, 8% and 8.35%.
Which people will have to pay more interest?
According to the ET report, a person associated with the case said that SBI has changed the rates on CIBIL score and external Benchmark lending rate (EBLR). This is a low -return product for us, so we have taken a decision to increase margin on new loans for customers with low credit score. This change will only apply to new customers and the old loan of ₹ 8 lakh crore will not be affected. SBI’s retail loan is the largest part of home loan in portfolio. Private banks have been criticizing this aggressive pricing strategy of public sector lenders for a long time.