The Housing Development Finance Corp. (HDFC) logo is displayed inside the bank’s branch in Mumbai, India. (Photographer: Vivek Prakash/Bloomberg)

HDFC Hikes Lending Rate By Up To 20 Basis Points

India’s largest mortgage lender HDFC Ltd. today upped its lending rates by up to 20 basis points, in line with similar moves by commercial banks.

The increase in the retail prime lending rate, on which it benchmarks the adjustable rate home loans, is effective from April 1, an official statement said. The rate hike is progressive, between 0.05 percent to 0.2 percent, with the lowest hike applicable to the low-ticket size loan, a company spokesperson said.

A loan for under Rs 30 lakh by a woman borrower, which is the lowest rate offered by the lender, will now be available at 8.4 percent, the spokesperson said, adding for others it will be 8.45 percent.

Loans between Rs 30 lakh to Rs 75 lakh will be available at 8.55 percent for women borrowers and 8.6 per cent for others. Those above Rs 75 lakh will be for 8.65 percent for women and 8.7 percent for others.

Despite no rate hikes by the Reserve Bank of India, the liquidity squeeze has resulted in several banks hiking interest rates since late 2017. It started with the private sector lenders like Axis Bank Ltd., Yes Bank Ltd. and Kotak Mahindra Bank Ltd. hiking their marginal cost of funding-based lending rates. That gradually percolated down to all the banks in the system including the largest lender State Bank of India Ltd.