Public sector banks give a boost to home loans

DREAM REALISED: A house under construction in Madurai. —

DREAM REALISED: A house under construction in Madurai. —   | Photo Credit: Photo: G. Moorthy

R. Sairam

Loans worth crores accorded ‘in-principle’ sanction

MADURAI: Public sector banks have imparted a major impetus to the home loans segment following the implementation of the special scheme, under which interest rates have been slashed.

The State Bank of India’s home loan mela, which covered 23 branches, was held in the city from January 9 to 11 and attracted over 700 enquiries. Its Regional Manager G. Ramanujam, said that ‘in-principle’ sanction was accorded to 603 loans amounting to over Rs. 58 crore.

The average loan amount sought was around Rs. 10 lakh. “Normally, these loan melas have a conversion rate of 30 per cent,” he said.

M. Kathiresan, Deputy General Manger, Indian bank (Madurai Circle), said that the Home Loan camp, held from January 23 to 25 at Tallakulam Branch, was meant only for first time applicants. It also came with free life insurance coverage.

Of the 177 enquiries, 91 cases were accorded in-principle with a business of Rs. 8 crore.

“Similar camps have been proposed at Gnanavolipuram in Madurai, Dindigul and other districts of Madurai Circle. Depending on the response, more camps might be held,” he said. The Indian Bank Madurai Circle controls Madurai, Dinidgul, Ramnad, Theni and Sivaganga districts.

The margin money requirements have also been relaxed under this new package, said M. Rasupandi, Senior Manager (Housing Finance Centralised Processing Unit), Canara Bank.

For the loans up to Rs. 5 lakh, the margin money has been reduced to 10 per cent from the normal 15 to 25 per cent, he said. The rates of interest for fixed loans, which is usually reset every three years, would not be changed for five years under this new scheme, said Mr. Rasupandi.

In-principle sanctions, as of January, was given to around 200 housing loans in Madurai city alone, he said.

Scheme details

In effect from December 12, 2008 to June 30, 2009, the interest rates were slashed to 8.5 per cent for home loans up to Rs. 5 lakh and 9.25 per cent for loans between Rs. 5 lakh and Rs. 20 lakh. No processing fee would be charged and the interest rates would not be increased for a period of five years.

Recommended for you