HDFC drops its retail prime lending rate (RPLR) on home loans

Mumbai: HDFC the premier housing finance company, today announced a reduction in its retail prime lending rates (RPLR) by 25 basis points, with effect from February 1, 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, while for the new home loan customers, HDFC's rate of interest under the adjustable rate home loan (ARHL) continues to be at 10.25 per cent annually.

"We have been able to bring down our costs due to improved operational efficiency and good quality portfolio, and as always, have ensured that it translates into a benefit for the customers,'' said Renu Sud Karnad, joint managing director, HDFC Ltd. ''While we were able to offer our new customers a special rate of interest since June 2007 because of good liquidity conditions, our existing customers were not able to enjoy the benefit."

HDFC benchmarks its lending rates on the cost of funds and says it has maintained a pre-determined spread. It says the buoyant economy, stable industrial growth and adequate liquidity in the banking system over the past six to nine months, have had a positive impact on the cost of funds, which it was happy to pass on to its customers.

HDFC's loan approvals during the nine-month period ending 31 December 2007 amounted to Rs29,376 crore as against Rs22,666 crore in the corresponding period last year, representing a growth of 30 per cent. Disbursements during the nine-month period ending December 31, 2007 amounted to Rs22,285 crore as against Rs17,465 crore, a 28 per cent growth during the same period in the previous year.