Pre-payment charges on home loans not affect business: SBI
State Bank of India said that closing down of pre-payment charges on home loan will not affect business. “Pre-payment charges make hardly any contributions to the revenue stream,”
SBI announced to do away with pre-payment penalties on housing loans with immediate effect. It had been charging about 2% of the outstanding amount as penalty if borrowers opted to foreclose their loans.
The key takeaways from the interview
• Pre-payment penalty measure to prevent malpractices
• Pre-payment penalty not a revenue stream
• Abolition of this (pre-payment) penalty won’t affect business
• Savings bank growth continues at its usual pace
• Have about Rs 35,000 crore of restructured accounts
• Microfinance (MFI) loans portfolio quite secure
• Exposure to MFI loans stands at Rs 800-1000 crore, as of now
• Don’t see MFI crisis as systemic issue
Microfinance (MFI) loans portfolio quite secure
• Exposure to MFI loans stands at Rs 800-1000 crore, as of now
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