State Bank of India will charge additional spread/margin over the repo rates in case of borrowers in specified situations where risk is seem to be higher. It has also announced the details of its repo-rate linked home loans to be offered from October 1 2019.
SBI has increased the total spread or margin it will charge over and above the repo-rate in computing the interest to be paid by borrowers on new floating rate loans. The effective benchmark rate will be equal to repo rate plus 2.65%.
The lowest rate for its repo rate linked home loan scheme has been revised from 8.05% (5.4%+2.25%+0.40%) to 8.20% (5.4%+2.65%+0.15%).
The increase in spread/margin for new floating rate loans from October 1 is as compared to the spread it was charging in the repo rate linked loans it was offering till some days ago.
The earlier repo rate linked loan scheme was withdrawn by the SBI few days ago in order to launch a revamped scheme effective from October 1. It will charge additional spread/margin over the rate for riskier borrowers.
It will add a premium of 15 bps to the card rate for non-salaried customers,10 bps for a loan up to Rs 30 lakh if LTV (loan-to-value) ratio is between 80-90% and a premium of 10 bps for customers falling under risk grade 4 to 6. Also, a 5 bps concession will be available to women.