HDFC announces half per cent interest rates for all customers

Pioneering housing financier HDFC today announced a reduction in its retail prime lending rates (RPLR) by 50 basis points, effective 22 December 2008.

The advantage of a cut in RPLR will accrue to all the existing floating rate customers over the period of next three months based on their respective reset dates.

Similarly the rates of interest on loans to NRI's have also been reduced.

"We have been able to bring down our costs due to improved operational efficiency and good quality portfolio," said Renu Sud Karnad, joint managing director, HDFC Ltd.

"As in the past, HDFC has ensured that reduction in the cost of its resources translates into a benefit in terms of lower costs for both existing and new customers. HDFC continues to efficiently manage its liabilities and reprice its debts," she added.

HDFC maintains a pre-determined spread, and the recent cuts in policy rates by RBI have created adequate liquidity in the banking system, which had a positive impact on the cost of funds.

HDFC will also reduce its deposit rates by 50 bps across all maturities effective 23 December, 2008. On an incremental basis retail deposits for the first seven months, April to October 2008, formed 62 per cent  of HDFC's funding requirement.

HDFC loan approvals during the six-month period ending 30 September 2008 amounted to Rs24,180 crore as against Rs18,948 crore in the corresponding period last year, a growth of 28 per cent, while the actual disbursals rose by 25 per cent to Rs17,788 crore as against Rs14,275 crore during the same period. NPAs or   instalments are outstanding for more than 90 days from the repayment date as at 30 September 2008 declined to 1.04 per cent of the loan portfolio as against 1.16 per cent last year.

Highlights of the cuts:

  • Retail Prime Lending Rate (RPLR) reduced by 50 bps
  • Interest on floating rate home loans up to Rs 20 lakh dropped to 10.25 per cent
  • Interest on floating rate home loans above Rs20 lakh dropped to 11.25  per cent
  • Interest Rates on Deposits dropped by 50 bps across all maturities