In a move that could improve its flow of home loans business, State Bank of India is putting in place an online sanction process which allows the bank to instantaneously approve loan amounts by linking its portal with Credit Information Bureau of India (Cibil). 

 

The bank is in the process of appointing service providers who will put in place systems that will enable automated processing of the loan applications by verifying the information submitted online with Cibil's database. After the loan is approved by the system , the borrower will have to get supporting documents and get the property cleared. The online application process will be available to borrowers who wish to refinance their loans. 

"It will take a while for the system to be in place but once that's done it will be able to verify most of the records online. Once the loan is approved, it will be mapped to the nearest office based on pin code for disbursement," said a senior official of the bank. But while the loan approval will be instantaneous, the borrower would still have to get the property cleared. 

SBI loans are the cheapest in the country and there is no reason why borrowers should go to another lender. The online application system will make it easier for borrowers who are tentative about getting their loans being approved ," the official said. According to Pratip Chaudhuri, chairman, SBI home loan disbursements doubled to Rs 150 crore a day after the bank cut rates in October. The bank charges 10% on loans up to Rs 30 lakh and 10.15% on loans above Rs 30 lakh. SBI has launched a festival offer where processing fee on loans sanctioned until Dec-end has been halved. The maximum fee has been capped at Rs 5,000. 

Cibil officials said several foreign and private banks had put in place automated processing systems for consumer durable finance, credit cards and personal loans. But this was the first time that it was being done for home loans. Besides confirming information of borrowers' income and indebtedness , banks are able to confirm PAN details by connecting to NSDL servers. 

Recently, Standard Chartered introduced a solution where a digital application was given in-principle approval in five minutes. The loan would be disbursed after the borrower completing KYC documentation. (Times of India)