HDFC cuts retail prime lending rate by 50 basis points
24 March 2009
Housing Development Finance Corporation (HDFC), the country's premier home loan provider, today announced a 0.5 percentage point reduction in its prime lending rate effective 25 March.
With this reduction, HDFC's retail prime lending rate (RPLR) stands at 14 per cent.
''We are now seeing a reduction in the costs on a portfolio level and as in the past HDFC has ensured that the reduction in cost is passed on to existing customers by way of a reduction in RPLR,'' Renu Sud Karnad, joint managing director of HDFC, said.
HDFC will reduce lending rates on all floating rate loans over the next three months based on their respective dates, the lender said.
HDFC said the reduction in lending rate follows an easing of its funding costs and improvement in operational efficiency.
''HDFC continues to efficiently manage its liabilities and re-price its debts. In the current environment there is a time gap between the reduction in the marginal cost of funds and the portfolio cost,'' HDFC said.
HDFC has cut its prime lending rate by 100 basis points over the past three months.
With inflation dipping below single digits, borrowers expect the Reserve Bank of India to slash its key lending rates for banks and retail lending rates of banks to come down further.