SBI says no plan to launch teaser loans as ICICI Bank

MUMBAI: The nation's largest lender State Bank said it has no plan to relaunch the dual/fixed rate home loan products, popularly known as teaser loans, as was done by rival ICICI Bank last week.

"Right now there is no plan for that," chairman Pratip Chaudhuri told reporters on the sidelines of a Ficci-IBA conference here.

Referring to the bank's earlier experience with the regulator when it had argued that its dual rate loan was not a risky teaser loan as was being made out by the RBI, Chaudhuri said, "the loan that we had earlier, in spite of lots of our persuasion with the Reserve Bank, they called it as a teaser loan."

"Today our home loan products are widely accepted and there is no shortage of demand for them. Our home loan portfolio is growing in the same way as was earlier. Borrowers are aware that these are the times of floating rates and that the rates will go up some time and then will go down," he said.

"Even our competitors have launched the fixed rate product only for two to three years after which the loan becomes floating. As of now, we have no plans to launch a dual rate loan," he added.

On August 19, the second largest lender ICICI Bank had launched two new home loan products with interest rates fixed for one and two years and floating from the third year onwards.

Under the new loan scheme of ICICI, a customer could avail of a housing loan at a fixed rate of interest for one or two years, after which the interest rate would become floating. In the one-year fixed rate home loan scheme, the bank is offering loans up to Rs 25 lakh at 10.50 percent, Rs 25-75 lakh at 11 percent and those above Rs 75 lakh at 11.50 percent.

Source: EconomicTimes