The largest public sector bank, State Bank of India, has recorded major hike in business in retail loans segment, particularly, the home loans and auto loans segment, following reduction in interest rates on these segments. About, two months ago, the bank had slashed its interest rates home loans and auto loans segment by up to 50 basis points.
Post this reduction, the bank has received about three times more home loan applications than it normally receives. Similarly, the demand for car loans has also increased about four times. On the matter, a senior executive of the bank said that about 1500 to 1600 auto loans applications are being received regularly by bank as against 300 to 400 applications they used to receive prior to the rate cuts. Similarly, for home loans also about 1000 applications are being received by the bank regularly.
At present, SBI is offering auto loans at an interest rate of 10.5 percent per annum and home loan at an interest rate of 10 percent per annum. These are the lowest interest rates on the said segments that are being offered by any bank or financial institution.