As though what has
already been done wasn’t enough, now builders
and developers in Kolkata along with builders across India are
eligible for a thirty-five basis point reduction in construction loans if they
apply for such a loan from the public sector’s State Bank of India. The loans
in question shall only be made available to builders for the construction of
affordable houses.
The State Bank of India
is the largest mortgage lender in the country and it hopes to remain so for the
foreseeable future. SBI has already has a blitzkrieg campaign to market its home loans to as many borrowers as possible. By offering loans to builders for
construction at lower rates than before the SBI is ensuring its dominance as a
lender in the real estate sphere. It’s likely that the stated purpose of the
thirty-five basis point loan concession to builders is to attract homebuyers
who purchase a property
in Kolkata or elsewhere in India. By attracting such homebuyers, SBI
will retain a comfortable lead over others banks with respect to the number of
loans it creates.
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Additional Benefits for
Women
Women who take a loan
from the SBI shall have to pay a 5 basis points lower rate of interest than
that paid by a salaried man. A 5 basis point translates into a .05 percent
lower interest rate. While salaried men will be charged interest at a rate of
8.40 percent every year, women shall be charged interest at the rate of 8.35
percent but only for a loan up to thirty lakh rupees.
When Banks Compete,
Consumers Win
News following the
announcement by the SBI led other large Indian banks to also offer loans at similar rates. This is good news for borrowers as they not only enjoy
advantages when borrowing from banks but also find it more affordable to buy a
house because builders are also finding it easier to finance projects. Many of
the largest banks in India are making a deliberate push to attract customers
for home loans. The governments’ initiative to provide thirty million new affordable
housing units in urban areas is likely to have a multiplier effect in different
sectors of the economy including in Banking.
Conclusion
The goal to provide
housing for all Indians by the seventy-fifth year of the country’s independence
is an ambitious yet attainable goal, even more so when public and private banks
are willing to offer loans to candidates seeking to finance for a house. The
launch of affordable upcoming
projects in Kolkata and elsewhere is expected to increase as a
result of the lower interest rates being charged by major Indian banks from
builders and borrowers.
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