The Housing Development Finance Corporation (HDFC) Ltd, India’s largest private sector bank (by assets), declared that they had reduced the Retail Prime Lending Rate (RPLR) on housing loans by 10 basis points, which is 0.10 percent). The change in RPLR will be a good sign for all the existing customers of the HDFC retail home loan.
The Adjustable Rate Home Loans (ARHL) is marked, by 10 basis points, with effect from November 10, 2020. As when the mortgage lender (HDFC) declared the reduction in retail prime lending rate on housing loans, the shares of the bank rise as much as 4.56%. The scrip was traded at 2,248.85 points which is up 4.55% from its previous close on the BSE, while the benchmark Sensex climbed up 1.03% at 43,036.56 points.
In a regulatory filing, officials of HDFC commented that the reduction in the retail lending rate on housing loans will benefit all existing retail home loan and non-home loan customers of the bank. Earlier this month, HDFC Ltd said that its September quarter standalone profit was down by 27 percent to Rs 2,870.12 crore. They had also disclosed a profit of Rs 3,962 crore last year. Four months back, HDFC had announced a reduction in the retail lending rate on both home loans and non-home loans by 20 basis points with immediate effect.
The prime lending rate is the interest rate that commercial banks levy on the creditworthy and financially sound customers of the bank, mainly large corporations. The rate on prime lending is generally fixed by the federal funds rate. It is considered to be the overnight rate at which the banks lend money to one another.
As of March 2020, HDFC is the largest bank in India in terms of market capitalization. HDFC housing loan provides online home loan solutions to the customers if they want to buy, construct, or renovate their dream house. They also provide legal and technical counseling to the customers so that they can make the right home buying decision. The other benefits include low-interest rate, longer tenure, comfortable home loan EMI and doorstep service, etc.
