The largest lender of the country, State Bank of India will soon be increasing the loan limit to people buying land to build a house by ten times. This is an attempt by the banking major to increase its hold in the home loan segment.
As per the proposal signed by the bank, it would be lending Rs. 10 crore to people for buying land. Earlier the limit for the same was Rs. 1 crore, said a senior SBI official.
"Acustomer will also be eligible to avail another housing loan for other housing-related construction on that plot, enjoying the benefit of running both the loans concurrently," said a senior SBI official.
The bank has however set the margin limit at about 35% for loans above Rs. 1 crore. For loans upto Rs. 75 lakh, the margin limit has been set at 20%.
"We have a liquidity of over Rs 40,000 crore; schemes such as this will help us achieve our credit growth targets," the official said.
SBI has recently extended the teaser home loan scheme till June 30.
The bank will however see to it that due diligence does not suffer in the process of increasing credit offtake in the housing segment.
"To minimise fraud risk, two title search reports from different lawyers will be obtained before sanctioning the loan," the official said.