On the back of a good recovery in the economic environment, rise in disposable income and supported by the festival schemes, banks are anticipating 50-60 per cent increase in disbursements in retail loans during the festival months this year, compared with same period last year.
Several banks have already announced their festival bonanza offer to lure customers by way of interest rate subvention and waiver in processing and documentation charges. Others are also expected to follow suit soon.
HDFC Ltd, which announced a dual rate home loan product on Tuesday, expects 20-25 per cent growth in disbursements of retail loans during the third quarter this year. The affordable housing segment was witnessing a higher growth.
State Bank of India might also consider extending its special home loan scheme based on the outcome of the Asset-Liability Committee (Alco) meeting later this month, its Managing Director, Mr S.K. Bhattacharya, had earlier mentioned.
According to Mr T. M. Bhasin, Chairman and Managing Director, Indian Bank anticipates about 65 per cent in home loan disbursements at Rs 1,000 crore (Rs 600 crore) during the October-March period this year.
The bank also plans to offer combo loan wherein a customer availing home loan would be entitled for an interest rate subvention of about 50 basis points in car loan or loan for consumer durables, he said. The attractive tax benefit associated with the purchase of a property also encourages a customer to a great extent, Mr Bhasin said.
“The effective rate of interest on Rs 15 lakh loan is just about five per cent even while the customer might be borrowing it at nine per cent and this is due to the tax benefit,” a senior official pointed out.
Allahabad Bank expects almost 90 per cent growth in disbursements at Rs 1,900 crore (Rs 990 crore) during this period.
Banks such as Punjab National Bank, UCO Bank and Allahabad Bank have already announced special schemes. United Bank of India might also take a call on launching special scheme for its customers post its Alco meeting to be held shortly.
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