SBI Pitches For Review Of Affordable Home Definition, Cites Jump In Average Loan Size

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

Chairman C S Setty said that the bank, which has the highest market share in the highly competitive affordable housing segment, has seen the average loan size increase to ₹51 lakh now, compared to around ₹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 ₹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% jump in its housing finance 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.