The largest lender of the country, State Bank of India may go for increase in interest rates of its much disputed teaser home loans in May. The next rate hike will follow the coming review of monetary policy by Reserve Bank of India in May.
A senior official of the bank however said that in case there is no policy rate hike in the next review, there will be no rise in teaser loan rates.
The teaser home loans offered by SBI had been in question by RBI since quite some time. These loans are a mix of fixed and floating rate where the fixed component of interest rates pertains to the initial 3 years of the loan while the remaining is floating in nature.
"The recent economic survey has also come in support of the rates as they helped in making housing available to a large number of people. So we don't see any reason to discontinue this scheme. However the rates may be stepped up whenever the base rate increases," said the senior official.