SBI goes ‘green’ with its home loans

SBI goes ‘green’ with its home loans
The Hindu Business Line, March 27, 2009, Page 1

DWELLING ON ECO THEME.

K Ram Kumar

Mumbai, March 26 State Bank of India has introduced a new home loan product that will make other banks go green with envy.

By launching ‘Green Homes’, the country’s largest bank wants to support rated environment friendly residential projects by offering concessions - reduced margin, softer interest rate, and zero processing fee - on home loans to discerning buyers.

In case you are planning to buy a house with a loan from SBI in an environment friendly residential project, which has been rated by the Indian Green Building Council (IGBC), then the bank is willing to woo you with concessions.

The concessions: the upfront margin that you will have to stump up will be lower at 15 per cent of the loan amount instead of the normal 20 per cent; interest rate on the loan will be 25 basis points lower than the card rate; and no processing fee will be charged.

A ‘Green Building/ Home’, according to the IGBC, is one that uses less energy, water and natural resources, creates less waste and is healthier for the people living inside compared to a standard building. The council is a part of the Confederation of Indian Industry - Sohrabji Godrej Green Business Centre.

“As part of our endeavour to promote rated eco-friendly residential projects, we have announced easy loan terms for prospective home buyers. Our move will also encourage builders to come up with such projects,” said a senior SBI official.

The bank, which introduced the ‘Green Homes’ product a couple of months back, is currently supporting ‘green’ residential projects by Tata Housing and Mahindra’s.

“Today, home buyers are ready to shell out extra money towards amenities such as swimming pool, club house and joggers’ park. Frankly, these are only ‘theoretical’ benefits which a majority of the residents hardly use. In the case of eco-friendly homes, owners will actually realise tangible as well as intangible benefits.

Hence, buyers should shed their reluctance to pay that extra, which can be recouped in 2 to 3 years, for buying a house in an eco-friendly project as they stand to gain via savings in terms of energy and water,” the official said.

Owners of ‘green homes’ can hope to reap tangible benefits in the form of 20-30 per cent energy savings as the apartments are designed in such a manner that they can enjoy ample natural light throughout the day.

The construction material used in such homes ensures adequate thermal storage mass for retaining heat energy thereby keeping the interiors cool despite the heat outside.

Further, water savings, anywhere between 30 and 50 per cent, can be made on account of rain-water harvesting and recycling.