SBI withdraws teaser home loan scheme, launches new 7-year car loan scheme

Amid concerns expressed by the Reserve Bank, country's largest lender State Bank of India (SBI) on Wednesday announced withdrawal of special home loan schemes, or teaser rates, with effect from May 1.

SBI Easy Home Loan and SBI Advantage Home Loan (teaser rate products) will be replaced by floating interest rate schemes on par with other commercial banks.

Under the teaser home loan scheme, SBI was offering lower rate of interest of 8-8.5 per cent for the first three years.

It invited severe criticism from RBI, which had said the scheme could impact the asset quality of SBI's home loan portfolio.

From the Archives In Pics: India's new business families Career: Should you follow your old boss into a new company? Should you rent or buy a house? In Pics: How these business tycoons changed How to borrow wisely? How disaster-ready is India Inc? Best companies to work for Infosys' almost-CEO How to bag the best home loan deal Special: Opposition to Jaitapur N-plant grows

The withdrawal of teaser rates comes within a month of the new chairman Pratip Chaudhuri taking charge at SBI.

The home loan from SBI will now attract an interest rate of 9.5 per cent to 10.25 per cent depending upon the loan amount, SBI said.

SBI has also launched the SBI Advantage Car loan Scheme, under which credit would be provided at 10.75 per cent for a maximum period of 7 years.