Teaser loans: SBI for talking it out with RBI
Seeking to temper the highly charged-up discourse on the teaser loans and the bank’s confrontational approach with the RBI, newly-appointed SBI Chairman Pratip Chaudhuri today said the bank will “engage” with the central bank to lower the higher-than-comfortable provisioning requirement.
“The current provisioning requirement of 2 % (on teaser loans) is a bit difficult for the bank when compared with the earlier 0.40 %,” Chaudhuri said at his first media interaction at the bank headquarters this evening.
State Bank of India will “engage with the central bank” to solve the issue, as it does not want to take a belligerent stance against the regulator, he said.
“The current product offers enormous value to the customers, it has helped millions to own homes…as a final settlement we would like to have something which delivers value to the customers and also takes care of the regulatory concerns,” he said.
Fearing troubles in repayment, RBI had increased the statutory provision coverage by five times to 2 % on the teaser loans — launched first by SBI in days of high liquidity — in the November policy review.
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SBI’s peers, which after being critical initially had launched their own teaser rate products, have since then discontinued the offering while the nation’s largest lender has persisted with the product.
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