(SBI) chairperson Arundhati Bhattacharya says that if borrowers
want to know what EMIs they have to pay, they can opt for a
fixed-rate loan for a longer period of time. In an interview
with TOI, she also said that SBI is betting big on technology,
given that it has to service a few crore more customers without
increasing costs. Excerpts:
With the new benchmark rates being reviewed every month, should
new home loan borrowers keep checking rates or will the annual
reset take care of everything?
Customers need to keep checking the rate. The Base Rate (which is
reviewed quarterly and below which a bank cannot lend) and
Marginal Cost of Lending Rate (which is a rate derived out of
incremental cost of deposits, and is reviewed every month) are
apples and oranges. Borrowers have to understand what the MCLR is
and identify their risk appetite. If they believe that it is better
to know for sure what their future EMIs will be, they can choose to
fix their rate for a longer period of time. We will soon come out
with a home loan that will have a fixed rate for a longer period.
They can also choose to go with the floating rate – the MCLR. But
to do a proper management, you need to keep watching rates.