MUMBAI: The State Bank of India (SBI), the nation’s largest lender, has requested a review of the definition of affordable housing, pointing to a significant rise in the average size of home loans recently.
Chairman C.S. Setty stated that SBI, which commands the largest share in the competitive affordable housing segment, has observed that the average loan size has increased to ₹51 lakh, up from ₹35-40 lakh just two years ago.
Setty emphasized, “The definition of affordable homes needs to be revised. This is what we have consistently communicated to the Government of India,” during a post-earnings interaction with reporters.
He noted that housing costs are rising across the country, necessitating a reassessment of what qualifies as an affordable home. As it stands, a home is classified as affordable if its price is capped at ₹45 lakh and the carpet area meets specific criteria. Lenders financing affordable home purchases benefit from policy incentives like priority sector lending and tax benefits.
“Given the rising cost of housing, the concept of affordable homes must be updated,” Setty stated.
SBI has reported a 13% increase in its housing finance portfolio for FY26, but Setty indicated that continued growth in this area is unlikely to affect the bank’s net interest margins (NIMs).
