SBI to increase processing feeSBI to increase processing fee
Apnaloan.com Research Bureau
09 Jul 2008
State Bank of India (SBI) plans to increase the processing fee on loans, both for corporate and retail. The bank may still offer some concessions on a case-to-case basis.
With the cost of funds going up, any additional income will enable the bank to maintain its bottom line. As reported by Business Line, according to some bankers, fees from sale of bank drafts are seeing a slowdown due to increasing online transactions, the processing fees on loans are an important source of revenue.
SBI saw a growth in income from fee by 23 per cent in 2007-08. The fee income for large corporates grew by 61 per cent and for mid corporates by 43 per cent.
The current processing fee on home loans is 0.25 per cent of the loan amount, with a cap of Rs. 5,000, which includes service tax.
ICICI Bank on the other hand charges 0.5 per cent of the loan amount as administrative fee or Rs 2,000, whichever is higher.
As reported by Business Line, Mr Ashok Mukand, Deputy Managing Director, State Bank of India said, "Our processing fees are rather low now. We are looking to raise processing fees on corporate loans and retail loans, though there could be some concessions, on a case-to-case basis. As our prime lending rate and home loan rates are the lowest in the market, our charges will be lower than that of other banks, despite the increase in processing fees."