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SBI's Sweet Surprise For Loan Defaulters! Check The Bank's Genius Idea To Ensure Timely Repayments

SBI  has observed that when borrowers plan to default, they conveniently ignore reminder calls, hence the idea is to pay them a surprise visit at their homes with a pack of chocolates.

SBI's Sweet Surprise For Loan Defaulters! Check The Bank's Genius Idea To Ensure Timely Repayments

New Delhi: India's largest public sector lender State Bank of India (SBI) has a delightful surprise for its potential defaulters. The bank is taking an innovative approach to ensure borrowers pay their loans on time, especially those in the retail sector. 

The bank has decided to greet potential defaulters with a a pack of chocolates. SBI  has observed that when borrowers plan to default, they conveniently ignore reminder calls. So, the idea is to pay them a surprise visit at their homes with a pack of chocolates, news agnency PTI has reported.

This quirky strategy is all about improving loan collections, and it couldn't have come at a better time when the bank's retail lending is on the rise. SBI's retail loan portfolio has ballooned by 16.46%, reaching a whopping Rs 12,04,279 crore in the June 2023 quarter, up from Rs 10,34,111 crore a year ago. This makes it the lender's largest asset class, and SBI's total portfolio now stands at Rs 33,03,731 crore, growing at a solid 13.9% year-on-year.

PTI said that the entire lending system is riding the wave of double-digit loan growth, clocking in at around 16%, and it's the retail loans that are leading this groovy charge. 

Meanwhile, last week SBI  announced its latest marginal cost of funds-based lending rate (MCLR). The SBI MCLR rates are effective from September 15, 2023, according to the SBI website. 

Here is the SBI Latest MCLR Rates Effective From 15 September 2023

Tenor Existing MCLR (In %) Revised MCLR (In %)*
Over night 8.00 8.00
One Month 8.15 8.15
Three Month 8.15 8.15
Six Month 8.45 8.45
One Year 8.55 8.55
Two Years 8.65 8.65
Three Years 8.75 8.75

The MCLR is the lowest interest rate at which a bank can make a loan to a customer.

The SBI MCLR rate announcement comes a month after the Reserve Bank of India (RBI) kept the repo rates unchanged at 6.5 percent. The Monetary Policy Committee (MPC) of the central bank in August 2023 unanimously decided to take a consecutive pause in its second bi-monthly monetary policy meeting of FY24 after a rate hike seen in previous six consecutive policies.