SBI helps to the real estate sector grew 43.4% in the fiscal year against the industry growth of 23.2%. Real estate loans now account for 17% of the SBI total loans, up from 13.7% in the previous fiscal.

Compared with this, real estate loans account for 13.2% of the loan book of other state-owned banks. New generation private banks have a greater exposure to the real estate sector—26%—but the pace of growth has been slower.

In fact, the proportion of real estate loans as a percentage of total loans has declined or remained at the same level in the last one year for almost all banks in the system except for the SBI group.

SBI officials, however, downplayed the faster pace of growth, saying the majority of the loans in its real estate portfolio are less risky home mortgages.

The commercial real estate portfolio fell to around Rs. 9,195 crore in September. The SBI home loan portfolio, at Rs. 92,383 crore, is 12% of the total loan portfolio of Rs. 7.9 trillion.

The sharp rise in SBI’s overall real estate to the lender’s controversial special home loan scheme or “teaser” loans.

SBI added around Rs. 36,000 crore in home loans till the scheme was discontinued early this fiscal year in the face of stiff opposition from the banking regulator.

Teaser loans offer cheap rates in the initial years. RBI asked SBI to set aside more money for such loans, saying that customers may not be able to cope with the increasing repayment burden in subsequent years and loan defaults may rise.

Analysts said higher interest rates and the economic slowdown are likely to impact the ability of individuals to repay their home loans.

“In the banking industry, overall there are higher chances of defaults emerging from home loan due to the steep rise in interest rates and the adverse market scenario.