LIC Housing Finance hike rates
LIC Housing Finance and Magma Fincorp have raised lending rates by 50 bps as money turns more expensive.
Close to ten banks hiked their base rates last week by 25-50 bps as deposits became costlier and other non-banking finance companies (NBFC) and housing finance companies (HFC) may follow suit.
LIC Housing Finance hiked prime lending rate(PLR) by 50 bps to 13% during its quarterly meeting held late last week .
RR Nair, director & chief executive, said, "We have seen an increase of 90 bps in our cost of borrowing between March to September this year. I don't think, a 50 bps hike in PLR, will impact our customers base as the entire industry is increasing rates." VLakshmi Narasimhan, CFO, Magma Fincorp said his firm had effected a rise of 25-50 bps in lending rates in the categories like commercial vehicles, construction equipment and SME segments given an increase of 25-30 bps in the cost of borrowing. ``However, we have not seen any erosion of our customer base owing to such lending rate hikes and we expect to grow our
loan book at 25% CAGR in the next three years," he said.
Deposit and lending rates hikes by banks have impacted the cost of borrowings of NBFCs and HFCs which raise resources from banks.
V Ravi, chief financial officer , Mahindra Finance also said in the last couple of months the company has seen a rise of 50 basis points in its cost of borrowings. "We will be reviewing out interest rates at our forthcoming meeting later this month," Ravi said.
Hemant Kanoria, MD, Srei Infrastructure, said, "With the high cost of funds, loan rates may be revised in January. We can temporarily manage any rise in interest rates to the tune of 25-50 basis points over a period of two to four months."
LIC Housing Finance hike rates
By: Bhavana Jhingan
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