It looks like some fight is brewing between the two leading housing financers - State Bank of India and HDFC, and the biggest beneficiaries would be the customers. CNBC-TV18's Gopika Gopakumar reports.
SBI has fixed an interest rate on all loans including the transferred loans at 8 per cent for a year and now this has disturbed HDFC, the numero uno player in the housing finance market.
Chairman of HDFC, Deepak Parekh, told CNBC-TV18 in an exclusive interview that he fears there could be a possible customer movement away from HDFC to SBI and he also said that there is no possible loss in the loans right now but more enquiries have been made by borrowers to transfer their loans to SBI.
That could be the reason why Deepak Parekh hit out at SBI’s plan and called it a ‘gimmick’, which he says is not trying to get any new money or loans in the housing finance market but only trying to get existing customers in the housing finance market.
SBI Chairman, OP Bhatt, reacting to the criticism raised by Deepak Parekh, clearly said competition is inevitable. He said this doesn’t mean there could be transfer of loans from one bank to another because a new plan has been introduced. He added lower rates are part of the game and it is just business as usual and if HDFC wants to cut their rates, it could go ahead.
It looks like a whole game of lower rates is going to continue. On Tuesday, Central Bank of India announced a similar scheme like the SBI; so, we could probably see, including HDFC bowing to pressure from SBI, and probably cutting rates for the home borrowers.
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