New Delhi: In festive mood, country's largest lender, the State Bank of India (SBI), has halved the processing fee on home and automobile loans. The reduced processing fee is available till the end of 2012. This comes days after the SBI slashed home and auto loans by 50 basis points. "With this reduction, the bank is quoting the lowest processing fee on both home and auto loans to our esteemed customers," it said.
For home loans up to Rs 25 lakh, the processing charge has become 0.125 per cent of the loan amount from 0.25 per cent, it said. In case of loans between Rs 25 lakh and Rs 75 lakh, the processing fee would be Rs 3,250 as against Rs 6,500 while loans above Rs 75 lakh, it would be flat Rs 5,000 as compared to Rs 10,000 per application earlier. With regard to auto loan, the processing charge has been slashed to 0.255 per cent of the loan amount as against 0.51 per cent.
Almost a month back, the SBI had slashed its base rate, the minimum benchmark rate below which the Reserve Bank of India (RBI) does not allow a bank to lend, by 25 basis points to 9.75 per cent. The bank had taken the decision in its asset liability committee meeting.
With the move, the borrowers would pay less interest for taking any form of retail or corporate loans. The rate cut was followed by the central bank's policy action of cutting cash reserve ratio (CRR) by 25 bps to 4.50 per cent. CRR is the portion of deposits that banks park with the RBI. It does not earn any interest. The reduction in CRR is estimated to release Rs 17,000 crore to banks.
(With Additional Inputs from PTI)