SBI to now charge processing fees on home loans, top-ups

After reducing deposit rates for its customers, State Bank of India has now decided to charge processing fees for home loans, top-up plans and loans to corporates and real estate companies. In an internal circular, the SBI said: "The full waiver of consolidated processing fee" offered during the festival period for loan proposals sourced up to December 31, 2019, is withdrawn. The waiver will continue for proposals sourced up to October 15, 2019, The Times of India reported.

The SBI had recently linked lending rates to benchmark repo rates, resulting in a sharp fall in its interest income. The bank will now charge around 0.4 per cent processing fee in the range of Rs 10,000-Rs 30,000 for individual borrowers, the daily quoted sources as saying, adding the bank would charge Rs 5,000 from builders.

SBI had on Wednesday cut its marginal cost of funds-based lending (MCLR) rate by 10 basis points (bps), effective October 10. This is the bank's sixth consecutive cut in MCLR in the current fiscal, and it comes on the heels of the 25 bps reduction in repo rate by the RBI last week. The Monetary Policy Committee slashed the short-term lending rate for the fifth time in a row bringing it down to 5.15 per cent.

However, the bank also reduced interest rate on retail savings accounts by 25 basis points (bps). SBI said savings accounts with balance up to Rs 1 lakh would earn 3.25 per cent interest from next month, down from 3.5 per cent currently.

Also read: State Bank of India cuts lending rates by 10 bps across tenors

Also read: State Bank of India cuts lending rates by 10 bps across tenors

Also read: Hopeful of rise in credit demand during festive reason: SBI chief Rajnish Kumar

Edited by Manoj Sharma