SBI recently announced that it is giving home loans at 8% interest. Then it got clarified that this rate is only for first year. What will happen in the second year and afterwards? Rate prevailing at that time which is likely to be higher than 8% would be charged.
I am surprised at this. Have we forgotten that the genesis of the current crisis was subprime loans in US?
What is a subprime loan? Loan given to people who can't afford to repay being lured by mortgage companies and then refinanced by other agencies by low interest rate during first year. We learnt all this just a few months ago.
So has SBI forgotten this lesson? Is SBI's decision a responsible one? Or is it only a gimmick to be seen as complying with the directions?
