State Bank of India (SBI), India’s largest lender, is neck and neck with mortgage leader and pioneer HDFC in terms of home loans outstanding, according to data from Icra, the rating agency. The bank is aiming to increase its home loan portfolio (opening balance of loans plus loans disbursed less repaid in a year) by 31% this year, the same as last fiscal, but the pie will be bigger because of a larger base or compounding. “We have a client base of more than 15 lakh individuals and we are aiming to add another 4 lakh this year,” said a top bank official. “We added about 2.92 lakh last year,” the official said, requesting anonymity.

The person did not say if more teaser rate type plans are on the anvil.Such loans were primarily behind the Rs 17,000 crore burgeoning of the bank’s portfolio last fiscal. Last fiscal, HDFC clocked a 15% in outstanding loans (new disbursals less repayments) on a 27% growth in disbursements. HDFC’s outstanding loans have grown by 30% only in fiscal 2008, while it has remained around 15-16% in the next two years. The pace of sanctions continues to be frenetic. “We have sanctioned loans worth Rs 3,650 crore spread across 31,400 accounts in April and May this year,” said the official. That, annualised, comes to more than Rs 22,000 crore —exactly the amount of outstanding the bank hopes to have for the year.

The special home loan scheme launched by SBI last year gave a boost to the loan growth in this segment. The scheme offers low fixed interest rates for initial years and floating rates thereafter. It has been revised several times but the fixed and floating rate combination has been maintained throughout. With the base rate coming in from next month, certain revisions are again expected in the scheme. “We will be able to take a call on that only when there is clarity on the base rate that is chosen for the bank,” said the official indicating that the decision will be taken only a few days before base rate sets in. It is expected that the interest rates on the scheme will be revised as per the base rate while the fixed and floating combination will be retained.

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