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SBI to Rethink Housing Construction Loans
20 Dec, 2025
Summary
- SBI will reassess its residential construction finance policy.
- Accountability and transparency are key for loan interest rates.
- Developers need 40-50% tenant commitment for office space loans.
State Bank of India (SBI) is planning to reassess its existing construction finance policy, particularly for residential real estate projects. This strategic review aims to foster a more robust and secure lending environment within the sector.
SBI Chairman C S Setty highlighted that future construction loans will prioritize accountability and transparency. These factors will significantly influence the interest rates offered, aiming to mitigate risks for both the bank and developers. For commercial ventures, a minimum of 40-50% tenant commitment is expected before financing is considered.
Setty also advised NBFCs in the housing finance sector to reduce operational costs, enabling them to offer more affordable loan options. The bank's approach to construction finance is evolving, with a focus on stable project management and risk mitigation to build lender confidence.
