<p> Country's largest lender State Bank of India has halved the home loan processing fee, a move which could be followed by other public sector lenders in the coming days.</p>.<p>The bank has slashed processing fee on home loan above Rs 75 lakh to Rs 10,000 from Rs 20,000, while for loans between Rs 30-75 lakh, the fees has been reduced to Rs 6,500 from Rs 10,000 earlier, a senior SBI official said.<br /><br />The new fee structure is applicable starting January 11, the official added.<br />The official, however, added that the processing fee for loans below Rs 30 lakh continues to be 0.25 per cent of the loan amount.<br /><br />The reason for slashing fee is to promote home loan products of the bank, the official said.<br /><br />Competitors like ICICI Bank and Axis Bank charge 0.5 per cent of the loan amount for home loans -- both floating and fixed both.<br /><br />At the same time, Bank of Baroda levies a charge of 0.4 per cent of the loan amount or maximum limit of Rs 50,000, while Bank of India charges Rs 20,000 flat fee for housing loans between Rs 25-75 lakh.<br /><br />According to another public sector bank official, banks could offer some incentive to promote home loan product above Rs 30 lakh as there has been some moderation in this segment.<br /><br />It could be in the form of lowering of fee or some concession in rates if interest rates don't come down by the end of the current fiscal, the official added.<br /><br />In other retail loans, particularly auto loans, some banks are offering concession in rate as well as waiving of processing charges to garner higher share.<br /><br />Some bankers also feel that the processing fee may go up in the medium term. However, charges are likely to remain stable for the next couple of months.<br /><br />"Since most of the banks have done away with pre-payment charges, I feel the processing charge in the industry as a whole would tend to go up in the medium term if not in the short run," Axis Bank Head (consumer lending and payments) Jairam Sridharan said.<br /><br />Last year, housing finance regulator National Housing Bank had directed all housing finance companies to desist from imposing a pre-payment penalty on home loan borrowers. Subsequently, many banks announced abolition of such charges.<br />SBI, Bank of Baroda, Bank of India, Punjab National Bank are some banks which scrapped pre-payment charges.</p>
<p> Country's largest lender State Bank of India has halved the home loan processing fee, a move which could be followed by other public sector lenders in the coming days.</p>.<p>The bank has slashed processing fee on home loan above Rs 75 lakh to Rs 10,000 from Rs 20,000, while for loans between Rs 30-75 lakh, the fees has been reduced to Rs 6,500 from Rs 10,000 earlier, a senior SBI official said.<br /><br />The new fee structure is applicable starting January 11, the official added.<br />The official, however, added that the processing fee for loans below Rs 30 lakh continues to be 0.25 per cent of the loan amount.<br /><br />The reason for slashing fee is to promote home loan products of the bank, the official said.<br /><br />Competitors like ICICI Bank and Axis Bank charge 0.5 per cent of the loan amount for home loans -- both floating and fixed both.<br /><br />At the same time, Bank of Baroda levies a charge of 0.4 per cent of the loan amount or maximum limit of Rs 50,000, while Bank of India charges Rs 20,000 flat fee for housing loans between Rs 25-75 lakh.<br /><br />According to another public sector bank official, banks could offer some incentive to promote home loan product above Rs 30 lakh as there has been some moderation in this segment.<br /><br />It could be in the form of lowering of fee or some concession in rates if interest rates don't come down by the end of the current fiscal, the official added.<br /><br />In other retail loans, particularly auto loans, some banks are offering concession in rate as well as waiving of processing charges to garner higher share.<br /><br />Some bankers also feel that the processing fee may go up in the medium term. However, charges are likely to remain stable for the next couple of months.<br /><br />"Since most of the banks have done away with pre-payment charges, I feel the processing charge in the industry as a whole would tend to go up in the medium term if not in the short run," Axis Bank Head (consumer lending and payments) Jairam Sridharan said.<br /><br />Last year, housing finance regulator National Housing Bank had directed all housing finance companies to desist from imposing a pre-payment penalty on home loan borrowers. Subsequently, many banks announced abolition of such charges.<br />SBI, Bank of Baroda, Bank of India, Punjab National Bank are some banks which scrapped pre-payment charges.</p>