“A lot of these loans have matured and have started moving into regular loans but we have not witnessed defaults in such loans” SBI. “Other than some stray cases of default which can be in any loan, there is no concern on such loans.”

Chaudhuri had withdrawn teaser loans from May 2011. Recently, when HDFC and ICICI Bank offered dual rate loans (fixed for 1-3 years) to home loan customers, SBI stayed away and its chairman then clarified that SBI does not have any plans to launch special home loans.

While the SBI was the first to offer such loans in 2009 under the chairmanship of OP Bhatt, private competitors, HDFC and ICICI Bank followed. But all of them discontinued the product after the RBI raised concerns and increased the provisioning norm on such loans five times over that of normal loans at 2 %.

The RBI was worried that once these loans, offered between 8.5 to 9.25 % over a period of 1-3 years, get converted into regular loans, the conversion may happen at high rates prevailing in the market and may lead to defaults.

“RBI as a regulator was concerned, it was a natural concern and we can’t go into an argument with them. But as far as our loan portfolio is concerned, the selection has been in such a way that these concerns have not impacted us,” said the official.

The banker further said that most of their loans are to the salaried class and to first-time owners and that particular segment does not want to lose their house. So they may sacrifice on many other things but they will pay their housing loan.