e-Circular

PBU-HOME LOANS Sl. No. : 163/2011 - 12 Circular No. : NBG/PBU/HL-HOUSING/15/2011 - 12 Wednesday, June 01, 2011. .

Chief General Manager State Bank of India Local Head Office All Circles Cir. No.RE/HL/AX/15 Dear Sir/Madam, PBBU : HOME LOANS BASE RATE CAMPAIGN MONTH JUNE 2011 SWITCHING FROM SBAR TO BASE RATE AT CUSTOMERS REQUEST We have introduced Base Rate from 01.07.2010 as per the directives of RBI. However, From 01.07.2010, both BPLR and Base Rate have been increased. The details are shown in the following table:(In %) Base Effective Date Increase SBAR Increase Rate 01.07.2010 11.75 7.50 17.08.2010 +0.50 12.25 +0.00 7.50 21.10.2010 +0.25 12.50 +0.10 7.60 03.01.2011 +0.25 12.75 +0.40 8.00 14.02.2011 +0.25 13.00 +0.25 8.25 25.04.2011 +0.25 13.25 +0.25 8.50 12.05.2011 +0.75 14.00 +0.75 9.25 Total increase 2.25 1.75
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1st June 2011

2. The table is clearly showing a sharper increase in SBAR compared to the Base Rate. For the benefit of the customer as well as the Bank, it is therefore important to switch accounts from a linkage to SBAR to a linkage to Base Rate as the customers would straightway benefit 50 basis points advantage if switch over to Base Rate takes place. The Home Loans sanctioned more than 3 years ago viz prior to 31st May 2008 no longer attract pre-payment penalty and owing to differential in the interest rates prevailing in these accounts and the current ruling interest rates in the market, these accounts are exposed to takeover by other Banks. Therefore, it has been decided to run a Campaign to convert the existing home loans with SBAR to Base Rate with the consent of the borrower on a war footing during this month. 3. Please refer to Cir. No.PB/HL/AX/28 dated 29th October 2010 and Circular No.CC/IT/CBP/DEV/LOANS/420 dated 28-06-2010 issued by GM(IT) on the above subject. We reproduce the important instructions mentioned in the earlier circulars for ready reference:A. A complete set of products under Base Rate, corresponding to pre- existing SBAR products has been created. If the existing SBAR linked product is already closed, the new BASE rate linked product will have closed status and no new accounts can be opened under it. However, this set of Base Rate linked products will facilitate switch over from SBAR to BASE Rate linked interest rate at the account level. It may, however, be noted that this switch is irreversible and switch from Base Rate linkage to SBAR would not be possible at a later date. B. The process of switch over from SBAR to BASE Rate linked products will be automatic with the selection of new option Transfer to Base Products. Branch will only be required to invoke the option. Selection of corresponding BASE Rate linked product will be done by the system as per list of products maintained backend. C. 6. Procedure for switching from SBAR linkage to Base Rate in CBS: A written request from the existing Home Loan Borrowers to change Interest rate from SBAR interest to Base Rate linkage is to be accepted. Change is to be implemented in the system as under:- (CBS Officers alone can perform this task) (i) For Maxgain Account (OD):Deposit/CC/OD Accounts & Services Amend Deposit/CC/OD (SCR:007050 Deposits: Change Details) Account Number: Enter A/c No. Option: Select last option from the drop down X Transfer to Base Product
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Transmit Another officer has to authorise the transaction. (ii) For Term Loan Account (TL):DL/TL Accounts & Services - Loan Tracking Operations (\\ SCR:019301 Loan Tracking: Master Menu) Select Action : 2. Exisiting Accounts Transmit (\\ SCR:019311 Loan Tracking: Existing Account) Account Number: Enter A/c No. Transmit ( \\ SCR:019302 Loan Tracking: Action Selection) Please Make Your Selection Here: [ 1 ] (Maintenance) Transmit (\\ SCR:019306 Loan Tracking: Account Maintenance) Please Make Your Selection Here: [ 4 ] (Account Creation) Transmit (\\ SCR:017050 Loans: Change Details) Please Make Your Selection Here: [ 9 ] (Transfer to Base Product) Transmit Another officer has to authorise the transaction. 4. The existing menu option of Account type / Home Branch Change being used for change of product type will not work for migration of account from SBAR to BASE Rate product. It will work only for SBAR to SBAR and BASE RATE to BASE RATE products change with the validation of closed/ open status and compatibility of products. 5. Please arrange to advise all the operating units under your control accordingly.

Yours faithfully, Chief General Manager (RE, H & HD)