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Rukmani Vishwanath

While the bulk of the housing loans business for the bank still comes from urban and metro areas, in the recent past increasing competition in the metros has led SBI to leverage its presence in the semi-urban areas.

Mumbai , March 22

STATE Bank of India is planning to give a renewed thrust to rural housing and is targeting by the end of this fiscal a business of Rs 750 crore-Rs 1,000 crore under its `Graham Nivas' scheme .

The bank introduced the scheme in November last, with the intention of disbursing housing loans to farmers and rural dwellers pursuing some income generating activities. Apart from financing homes, through this scheme, the bank's rural customers can also avail themselves of loans to purchase tailoring shops, cowsheds, grocery stores, land, etc.

Sources close to the bank said SBI sees significant scope to market housing loans in rural areas. "Seventy per cent of the Indian population still dwells in rural areas, so there is definitely a market. There were some problems typical to these areas earlier, like people did not have title deeds so mortgages were difficult. But with the renewed thrust, there is a special emphasis to take care of these problems," said an official.

While the bulk of the housing loans business for the bank still comes from urban and metro areas, in the recent past increasing competition in the metros has led SBI to leverage its presence in the semi-urban areas. As per regulatory definition, a rural area for marketing housing loans should be an area with a population that does not exceed 50,000.

Although as on December 31, 2003, the bank has an outstanding of Rs 2,500 crore and 1,43,000 home loan accounts under the Government's `Golden Jubilee Rural Housing Scheme,' it hopes to enhance its disbursals to this sector with its newly launched Graham Nivas scheme.

Although the bank has an outstanding of Rs 2,500 crore and 1,43,000 home loan accounts, as on December 31, 2003, under the Government's `Golden Jubilee Rural Housing Scheme,' it hopes to enhance its disbursals to this sector with its newly launched Graham Nivas scheme.

According to officials, the Graham Nivas scheme is much more flexible than the Golden Jubilee scheme and, therefore, is likely to attract more customers. " Under this scheme no mortgage is necessary for loans up to Rs 50,000. Also, we have provisions for repayment on a monthly, half-yearly and yearly basis, while the Golden Jubilee scheme has provisions only for half-yearly and yearly repayments," said a bank official.

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