HDFC HIKES INTEREST RATES BY 50BPS AS CRR EFFECT KICKS IN
HDFC, the country’s largest housing finance company has raised interest rates on
loans by 50 basis points, the third hike during the current financial year. HDFC
has, however, left fixed rates unchanged at 11 percent. Floating rate loans have
gone up to 9.5 percent for loans above Rs 10 lakh while interest rates on loans
below Rs 10 lakh will go up to 9.75 percent. The hike has reduced the gap
between floating rate loans and fixed rate loans, but the difference is still
over one percentage point.
“Our maturing deposits are all being renewed
at higher deposit rates. Interest rates on fresh loans have also gone up. We had
no choice, but to increase our lending rates,” said Deepak Parekh, chairman,
HDFC.
The increase in PLR by 50 basis points to 12.75 percent will mean
that the interest rate will rise for customers who have opted for floating loans
earlier. The rise comes close on the heels of an increase in deposit rates in
December. The institution had increased returns by close to 25 basis points.
Besides deposit rates, HDFC has seen a rise in its wholesale borrowing costs
too, because of the increase in bond yields. HDFC has been the last amongst the
big lenders to increase rates following the hike in cash reserve ratio.