HDFC cuts 50 bpts in retail prime lending rate
By Our Banking Bureau | 04 Sep 2002
The new fixed rate on loans of a five-year tenure will be 9.75 per cent; on loans with tenure of six to 10 years it will be 10.25 per cent; and for the 11-20 year bracket it will be 10.75 per cent. But the rates are still a few notches above what SBI and LIC Housing Finance charge the two entities charge an interest rate of 9.5 per cent on five-year loans.
HDFC general manager (Mumbai region) Suresh Menon says his companys cost of funds does not allow it to lower the interest rates any further. But unlike SBI and LIC HF, we are offering the benefit of reduced interest rates to all our customers by reducing our RPLR. The lower rates of interest offered by our competitors is applicable only to new loans. In their case, existing customers do not get the benefit, while by cutting our RPLR we are passing on the benefit to all clients.
HDFC is also introducing an option of monthly rest from 4 September 2002. Under the option, loans up to five years will carry an interest rate of 10 per cent, between six and 10 years it is 10.5 per cent, while for loans of 11-20 years it is 11 per cent.
The benefit of the lower PLR is also being passed on to HDFCs non-resident Indian customers. According to the housing loan company, it is passing on the lower cost of borrowings to its customers. It has cut deposit rates by 250 basis points since April 2001 twice this fiscal year alone.
