In FY22, SBI disburses Rs 1.12 lakh crore in home loans

State Bank of India (SBI) has disbursed a record Rs 1.12 lakh crore in loans to individual home buyers through the end of January in FY22, as demand for housing in the hinterland surged, allowing it to leapfrog specialist lenders in the mortgage business.

This represents a 20% increase over the same period in FY21.

Home loan disbursements have now surpassed pre-Covid levels, according to two industry sources, highlighting end users’ appetite for new homes.

A spokesperson for SBI confirmed the development, stating that the expansion was geographically diverse.

“As of January 22, our bank had disbursed Rs. 1.12 lakh crore in home loan and home related loans during the current fiscal year,” the spokesperson said in response to ET’s inquiry.

Approximately 40% of such disbursements came from tier-1 cities, with the remainder coming from other cities and towns. According to reports, the average ticket size for such loans is Rs 34 lakh.

Mumbai, Hyderabad, Kolkata, Chennai, Ahmedabad, Bangalore, and Pune all receive a fair share of the funds.

“The majority of this year’s record disbursements occurred between July and now as the infection virulence has been gradually decreasing,” one of the cited individuals said.

The bank has waived processing fees until March 31 of this year in order to attract more customers with a competitive rate of 6.7 percent. This minimum rate may increase by up to 20 basis points depending on an individual’s CIBIL credit score.

Depending on the ticket size, a customer can save anywhere between Rs 3,500 and Rs 10,000 on loan applications. It is set at 0.35 percent of the loan amount.

During the period, the bank sanctioned approximately Rs 1.26 lakh crore in home loans and sourced approximately Rs 1.74 lakh crore in home loan applications that are currently being appraised.

The bank has a 35.62 percent market share in home loans. It reported an 11% year-on-year increase in outstanding home loans to Rs 5.38 lakh crore.

HDFC Ltd, the largest private sector mortgage lender, increased loans to individuals by 16 percent, outpacing the company’s reported 12 percent growth in total assets under management at Rs 6.18 lakh crore. Individual home loans stood at Rs 4.08 lakh crore as of December 31 last year (adjusted for sell-downs).

SBI has approximately 220 dedicated Retail Asset Central Processing Centres (RACPC) across the country where it evaluates home loan applicants.

“If large lenders are seeing traction in home loan disbursements, it indicates a revival in demand,” said Karthik Srinivasan, Head – financial sector ratings at ICRA Ratings.

SBI has reduced loan processing time to just five days for projects that have already been approved by the bank.

“Recently, SBI has been receiving encouraging loan applications from smaller towns (tier-III cities), as people are now concerned about owning a home in the aftermath of the pandemic, which has a high economic cost,” said another executive.