Green Home Loan Scheme: The interest on home loan is higher than before. The repo rate has been revised several times by the RBI. Due to this, the interest of home loan has also become more than before. After increasing the interest rates, the largest public sector bank SBI is considering starting a scheme.
State Bank of India (SBI) will give incentives to borrowers to buy units in green housing projects under this scheme. According to Mint’s report, under this scheme, the bank will offer a discount of 10-25 basis points (bps) on interest rates. SBI had earlier introduced a similar home loan scheme, but discontinued it in 2018.
Plan was started for eco-friendly house
In the financial year 2009-10, the lender had launched ‘SBI Green Homes’ initiative to encourage developers to build eco-friendly housing projects, as disclosed in its annual report.
According to the bank, the plan proposed is to assess the Environmental, Social and Corporate Governance or ESG compliance builders and offer affordable loans to homebuyers. For retail customers, the discount will be based on the existing external benchmark based lending rate at 9.15 per cent.
This scheme emphasizes the demand for housing development
Notably, in February, SBI completed a syndicated social loan of $1 billion, which included $500 million in base amount and a green shoe option of another $500 million. SBI’s plan to re-introduce green home loan product emphasizes the growing demand for sustainable housing development.
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