SBI expects rise in home loan defaults due to higher EMIs: says SBI Chairman

State Bank of India (SBI) is expecting a small rise in defaults in home loans due to increase in equated monthly instalments (EMIs), O P Bhatt, chairman, SBI, said on June 28, 2007. The bank is planning to increase the EMI amount of existing home loans under floating rate interest rate. Till now the bank had been increasing the tenure to adjust for the higher outgo due to interest rate hike.

Speaking to newspersons, Mr Bhatt said that the bank has already seen a slowdown in home loans due to high interest rates. In the last one year, interest rates have gone up by almost two percentage points.