The rising interest rates on home loans due to multiple revisions in the repo rate by the RBI have prompted the State Bank of India (SBI), the largest public sector bank, to consider introducing a new scheme.
The proposed scheme aims to incentivize borrowers to purchase units in green housing projects.
Under the initiative, SBI plans to offer a discount of 10-25 basis points (bps) on interest rates for eligible borrowers.
This move echoes a previous home loan scheme introduced by SBI in 2009-10, known as ‘SBI Green Homes’,
which aimed to encourage developers to construct environmentally friendly housing projects.
However, the scheme was discontinued in 2018.
As part of the new plan, SBI intends to evaluate builders’ compliance with Environmental, Social, and Corporate Governance (ESG) standards and provide affordable loans to homebuyers.
Retail customers can expect a discount based on the prevailing external benchmark-based lending rate, currently at 9.15 percent.
The reintroduction of the green home loan scheme by SBI highlights the increasing demand for sustainable housing development.
In line with this, SBI recently completed a syndicated social loan of $1 billion, with $500 million earmarked for the initiative and an additional $500 million available as a green shoe option.
By launching this new scheme, SBI aims to support the growth of eco-friendly housing and meet the rising demand for sustainable living options.
