RBI has no plan to stop teaser loans: Subir Gokarn

MUMBAI: Reserve Bank Deputy Governor Subir Gokarn today said the central bank has no plan to ban teaser loans but warned that any such product will attract 2 per cent additional provisioning.

"There is no attempt or intent on the part of RBI to stop these products or prevent them any way. We are only saying that there is some additional risks involved in such products and hence more provisioning have to be made for any such products," Gokarn told reporters on the sidelines of a Ficci seminar here.

"Whether they fall into such (teaser) category is something my colleagues in the regulatory department to decide, but the policy response to any such structure is that once it is deemed to satisfy any of those criteria of (teaser loans), it would attract higher provisioning requirement of 2 per cent which we imposed recently.

"So if you have a product that falls into such a structure, then you will have to make the additional provisioning. It is very clear," he said when asked whether the regulator is planning to bracket the recently launched home loan schemes by ICICI Bank and HDFC as teaser loans.

Recently ICICI Bank and mortgage lender HDFC had offered a fixed rate home loan products to attract more borrowers, as credit growth slowed in the face of rising interest rates.