MAIN: ADV-56 /2012-13 DT. 24-08-2012 a SUB : CRMKTG - 13 CO/PERSONAL BANKING DEPARTMENT FILE M- 2 S- 204 Home Loan - 2012 Offer for Residents and NRIs - Introduced w.e.f. 25.08.2012 to 31.10.2012 With the Festive season fast approaching there is all round growth in real estate market both in Tier I and Tier II Cities. With a view to be competitive in the market and to provide retail loans at affordable rates, it has been decided to introduce Home Loan-2012 Offer w.e.f. 25.08.2012 and upto 31.10.2012 with the following special features: Reduced Rate of Interest for home loans. Complete waiver of processing/administrative charges. Abolition of time buckets in home loans. Facility for existing home loan borrowers to switch over to the new scheme by paying a conversion fee. Waiver of conversion fee for staff members who desire to switch over from the existing Home Loan Scheme to Home Loan 2012 Scheme. All fresh Home Loans sanctioned on or after 25.08.2012 can be considered under Home Loans 2012 Offer. RATE OF INTEREST (1)Home Loan: Interest rates for fresh Home Loans (both for Residents & NRIs): 1.1 Variable ROI (All rates linked to our present Base Rate of 10.50%) Upto ` 30 lakhs > ` 30 lakhs & upto ` 75 > ` 75 lakhs lakhs 10.50%(Base Rate) 10.75% (Base Rate + 0.25%) 11.00%(Base rate +0.50) It may be noted from the above that we have opted for abolition of all time buckets from the existing rate. Now we have a rate structure irrespective of the period of the loan but depending upon the ticket size of the Home loan. 1.2 Fixed ROI: 1% above the variable ROI with reset at the end of every 5 years for limits upto ` 200 lakhs Page 1 of 5
A :: 2:: Home Loan 2012 Offer for Residents & NRIs 1.3 Rate of interest for Home Loans to be sanctioned under Commercial Real Estate (CRE) exposure: For the Home loans to be classified as Commercial Real Estate (CRE) exposure, as per IB Home Loan scheme norms, the rate of interest is as under: 2% above the applicable Home Loan (variable) interest rates based on the limit. No loan under CRE can be considered with fixed rate of interest. As per Credit Risk Management Policy, prior administrative clearance is to be obtained from Head Office by the field level functionaries as hitherto. 1.4 Plot Loan (Resident & NRI): 1% above the applicable Home Loan (variable) interest rate based on the limit ** No Plot loan can be considered with fixed rate of interest. **Construction to commence within 2 years from the date of availing the loan / from the date of handing over possession by the Government Housing Development Agency, as the case may be. If the construction is not commenced within maximum stipulated period, higher interest rate @ Interest Rate applicable for Ind Mortgage Loan (or) Base Rate+4.75+1.50, whichever is higher is to be charged after expiry of stipulated period for commencement of construction for the delayed period. Products from 1.1 to 1.4 will enjoy the benefits of the new offer. 1.5 For IB Home Improve loan, the existing Rate of interest is to be continued {Base Rate + Spread (1.25%) + TP (0.50%) i.e. 12.25% p.a. at present}. All other norms of our existing Home Loan / Plot loan / IB Home Improve scheme shall continue to be applicable for the HOME LOAN 2012 Offer also. Fresh product codes for opening the account in the CBS system, under HOME LOAN 2012 Offer will be intimated. It may be observed that our rates of interest on Home loans under this scheme are very competitive. As there is stiff competition among the Banks to tap the market, to reap the inherent benefits, there is an imperative need for us to be proactive for better penetration of the retail segment. As the above revision is proposed only for the fresh home loans sanctioned, the prospective borrowers will be having advantage over the existing borrowers. To prevent Home loan portability from one bank to another to take advantage of the reduced interest rate after the abolition of prepayment charges for home loans, we offer the existing home loan borrowers to switch over to Home Loan 2012 Offer by paying a one-time fee of 0.57% (inclusive of Service Tax) on the balance outstanding. The existing Home Loan/plot loan borrowers with variable ROI and Fixed ROI (including home loans sanctioned under commercial real estate exposure), whose accounts are in standard category, may exercise an option to move to our Home Loan 2012 Offer, by paying a one time fee of 0.57% (inclusive of service tax) on the balance outstanding. Branches are advised to refer to CO Circular No ADV134/2011-12 dt. 23.12.2011 and follow the same procedure (Conversion fee to be recovered on 0.57%) for extension of the scheme to existing home loan borrowers. Page 2 of 5
A :: 3:: Home Loan 2012 Offer for Residents & NRIs Staff members and Retired staff members who have already availed Home Loan under our previous schemes can also switch over to the Home Loan 2012 Scheme without paying the conversion fee of 0.57%. Processing charges and administrative charges are waived during the offer period (from 25.08.2012 to 31.10.2012) for fresh Home Loan to be sanctioned. Branches are urged to take advantage of the revised interest rates and garner maximum number of home loans to increase our market share in this segment. More number of home loan melas may be conducted in potential centers and enquiries received, in principle sanctions given in these melas may be converted to real business. 2. Conversion of Home Loans and Car Loans disbursed during the Festival Offer 2009 (20.08.2009 to 31.10.2009) linked to BPLR fixed to BPLR floating rate of interest. We had come out of a festival offer for home loans and vehicle loans from 20.08.2009 to 31.03.2010. These loans were linked to BPLR and were enjoying fixed rate of interest for the first three years. These loans are now due to be converted to variable rate of interest linked to BPLR. The revised rate of interest applicable to Festival Offer-2009 home loan and vehicle loan borrowers from is given in Annexure. CBS Project Office has already made necessary changes in the software for system generated product change of festival offer Home Loan/Vehicle Loan products from the BPLR linked fixed rate products to BPLR linked Variable Rate Products. A letter is also generated to inform the account holder about the change in the interest rate and EMI amount. Project Office will move the modified programme to production stage so that individual accounts disbursed during the Festival Offer period 2009, Home Loan/Vehicle Loan, may have a smooth transition. The rate now applicable to these accounts has no correlation to the existing market rate. Hence to prevent the exodus of these home loans under the Festival Offer-2009 the following offer may be made to them taking a written request of the customer. 1. Option to convert the existing Home Loan/Vehicle Loan linked to BPLR to Base Rate product. 2. To avail the interest rate offered by us under the offer period by paying a one time fee of 0.57%. Branches to ensure that all the festival offer accounts are retained with us. Branch Managers and Zonal Managers are advised to take advantage of this Special Offer and canvass more business under Home Loans and Car Loans and improve our market share for a real and sustained growth without compromising the asset quality. N. Eswaran General Manager (T & I /SP) Page 3 of 5
A :: 4:: Home Loan 2012 Offer for Residents & NRIs I. Home Loan Festival Offer (both resident and NRI) (For loans sanctioned from 20.08.2009 to 31.03.2010) Annexure 1. Home Loan for Construction or Purchase of House / Flat 1.1 Sanctioned Limits upto Rs. 20 lakhs Period of Loan Festival Offer Rate of 8.25% Fixed > 5 years up to 10 years 8.25% Fixed > 10 years up to 15 years 8.25% Fixed > 15 years up to 20 years 8.25% Fixed Interest rate effective from BPLR (14.75%) + TP(0.50) minus 3.50% =11.75% (Floating) BPLR (14.75%) + TP(0.50) minus 3.25% =12.00% (Floating) BPLR (14.75%) + TP (0.50) minus 3.00% =12.25% (Floating) BPLR (14.75%) + TP (0.50) minus 2.75% =12.50% (Floating) 1.2 Sanctioned Limits above Rs. 20 lakhs & upto Rs. 30 lakhs BPLR (14.75%) + TP (0.50) minus 3.25% 8.50% Fixed =12.00% (Floating) BPLR (14.75%) + TP (0.50) minus 3.00% > 5years up to 10 years 8.50% Fixed =12.25% (Floating) BPLR (14.75%)+ TP (0.50) minus 2.75% > 10 years up to 15 years 8.50% Fixed =12.50% (Floating) BPLR (14.75%)+ TP (0.50) minus 2.50% > 15 years up to 20 years 8.50% Fixed =12.75% (Floating) 1.3 Sanctioned Limits above Rs. 30 lakhs & upto Rs. 50 lakh BPLR (14.75%) + TP (1.00) minus 2.75% 9.00% Fixed =13.00% (Floating) BPLR (14.75%) + TP (1.00) minus 2.50% > 5years up to 10 years 9.00% Fixed =13.25% (Floating) BPLR (14.75%)+ TP (1.50) minus 2.25% > 10 years up to 15 years 9.00% Fixed =14.00% (Floating) BPLR (14.75%)+ TP (1.50) minus 2.00% > 15 years up to 20 years 9.00% Fixed =14.25% (Floating) 1.4 Sanctioned Limits above Rs. 50 lakh & upto Rs. 2 crore BPLR (14.75%) + TP (1.00) minus 2.75% 9.25% Fixed =13.00% (Floating) BPLR (14.75%) + TP (1.00) minus 2.50% > 5years up to 10 years 9.25% Fixed =13.25% (Floating) BPLR (14.75%) + TP (1.50) minus 2.25% > 10 years up to 15 years 9.25% Fixed =14.00% (Floating) BPLR (14.75%) + TP (1.50) minus 2.00% > 15 years up to 20 years 9.25% Fixed =14.25% (Floating) 2. Plot Loan (both resident and NRI) Category of Loan For sanctioned limits upto Rs. 10 lakhs Festival Offer Rate of Interest for first 3 years 8.25% Fixed Festival Offer Interest Rate from 4 th year onwards BPLR (14.75%+ TP(0.50)minus 2.50% =12.75%(Floating) Page 4 of 5
A :: 5:: Home Loan 2012 Offer for Residents & NRIs 3. I B Home Improve Festival Offer Rate of Interest for first 3 years Festival Offer Interest Rate from 4 th year onwards 8.25% Fixed BPLR(14.75%) + TP (0.50)minus 2.25% =13%(Floating) 4. Car Loan Festival Offer (For limits upto Rs. 10 lakh only) Tenor FO Rate From 4 th year onwards For Repayment upto 3 years 10.00% 11.25% Fixed For Repayment above 3 years & upto 5 years 10.25% 11.25% Fixed Page 5 of 5