PSBs to Terminate Teaser Rate Regime
Teaser loans may be on their way out with Canara Bank and Union Bank of India opting to terminate the scheme, anticipating high interest rates.
It is reported that home and auto loan customers will now have to spend more with several public sector banks including the State Bank, Punjab National Bank and Bank of India (BoI) deciding to end the concessional or limited period loan regime known as teaser rates.
The decision to shut down the schemes ahead of schedules was announced less than a week after Axis Bank closed its fixed-cum-floating scheme.
However, HDFC, the country's largest mortgage financier, has planned to extend its scheme from February 13 to the end of the month, sources revealed. The country's largest lender State Bank of India also decides to stick to the scheme till the end of March, executives added.
The public sector banks, which are extend low interest rates for the initial period of the loan to lure new customers. In addition, they have planned not to extend the validity of their schemes beyond March.
Recently, the country's largest lender State Bank chairman OP Bhatt had revealed that special home and auto loan schemes would continue only till the end of March. The SBI has been trying to attract more customers by offering home and auto loans as low as 8 per cent with a limited period offer.
