SBI pitches for review of affordable home definition, cites jump in average loan size

Mumbai: Country’s largest lender on Friday sought a review of the affordable home definition, citing a sharp increase in its average size in the recent past.

Chairman said that the bank, which has the highest market share in the highly competitive segment, has seen the average loan size increase to Rs 51 lakh now, compared to around Rs 35-40 lakh two years ago.

“…the definition of affordable homes is required to be changed. This is what we have been telling the government of India,” Setty told reporters at the customary post-earnings interaction.

He said the cost of housing is going up in the country, and hence, we need to revisit what qualifies as an affordable home.

At present, a home qualifies as affordable housing if its cost is up to Rs 45 lakh and the carpet area is up to a particular size. Policy incentives for lenders financing affordable house purchases include treatment of the loans as priority sector lending and also tax sops.

“The cost of housing is going up; the concept of affordable homes has to be changed,” Setty said.

SBI reported a 13 per cent jump in its portfolio in FY26, and Setty said that a continued growth in the vertical is unlikely to move the net interest margins (NIMs) for the bank.