With an aim to increase its presence in the unorganised segment, the country’s largest lender State Bank of India (SBI) gears up for a co-lending model for home loans.

The lender says it has waived the processing fee till March for borrowers availing home loans for the bank’s approved projects. “The bank is gearing up to initiate a co-lending model for home loans which will help boost SBI’s footprints in the unorganised sector,” says a statement from the bank.

In September 2018, the Reserve Bank of India (RBI) had come up with a co-origination model between banks and non-banking financial companies (NBFC) for providing credit to the priority sector.

The banking regulator rechristened the scheme as Co-Lending Model (CLM) last November and revised the terms to provide greater operational flexibility to the lending institutions.

The model aims to improve the flow of credit to the unserved and underserved sectors of the economy and make available funds to the ultimate beneficiary at an affordable cost, considering the lower cost of funds from banks and greater reach of the NBFCs.

“Co-lending as a financial tool will go a long way in benefiting the businesses,” says Housing.com Group COO Mani Rangarajan. The real estate sector has been demanding that lending should be eased and efforts from the government, RBI and banks will definitely help the sector, he believes.

SBI, which enjoys 34 per cent of the market share in the home loan pie, crossed the Rs 5-lakh-crore mark in its home loan business and expects to double the portfolio in the next five years.

The lender offers an interest rate on home loans starting as low as 6.80 per cent per annum. It onboards around 1,000 home loan customers per day on an average. “SBI has completely waived the processing fee till March 2021 for customers availing home loans in its approved projects,” says the statement.

The bank is also working on themes like focused development of the home loan business, refined analytics for boosting growth, easing home loan journey for customers, and post-disbursal engagement with home loan customers, it says.