Sunday, July 20, 2014

State Bank of India Home Loans - Wastage of Time, Effort and Money

If anybody wants to apply for a home loan from State Bank of India or any other nationalized bank, I will suggest you not to waste your time and money on them. Instead apply for a home loan from any private sector bank. Though you might find interest rate bit higher than the nationalized bank but you will save lot of time and effort. The above statement does not hold true, if you are a employee of any Nationalized bank because employees enjoy home loan facilities without any conditions and at very low interest rate.

The incident happened to me and it can happen to anybody, so beware and don't think that Nationalized bank do not follow malpractices. I started inquiring about home loan from State Bank of India in December 2013. I got the reference of an employee from SBI and started conversation with him. He told me to submit many documents which I did as per the requirements. It took me around 10-15 days to put together all the documents. I also paid the processing fees through cheque. My home loan was approved after 1 month of waiting time and lots of inquiries. I visited the branch twice during this period to get the status of home loan. At each visit, the attitude of employees was unsatisfactory. They keep on transferring their duties to each other.

At the time of disbursement of loan amount, I showed them all my transaction details. Suddenly, they brought up the rule of not providing home loan on premium amount. Premium amount is the seller's profit. If an home owner wanted to sell his/her home which is under construction, obviously the seller will sell the home on profit. State Bank of India officials told me that they do not give home loan on the premium amount but on the actual amount of the home on which seller has bought it from the builder. This whole statement from them does not made any sense and in the end I had to choose private bank. The whole documentation, approval and disbursement process took only 2 weeks and I got the home loan. It is not about that I have been charged processing fees but it is about my effort and time which is wasted by SBI.

After few days, I wrote an email to Chairman of SBI and CCed it to few other people including guys from RBI regarding this matter. Chairman of SBI forwarded my mail to DGM of SBI and DGM of SBI forwarded the mail to AGM of SBI. The AGM of SBI replied me with a simple statement that they do not provide home loan on the premium amount. Thank you Mr. AGM, but that thing I already know. I want to know the reason that why private banks are providing home loans on this amount but State Bank of India, do not. Below is the mail which I sent to the SBI and their reply.