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HDFC raises interest rate on home loans; EMIs to cost more

Mortgage lender HDFC, which is also India's largest housing finance company, on Monday increased its lending rate.

twitter-logo BusinessToday.In        Last Updated: October 1, 2018  | 17:23 IST
HDFC raises interest rate on home loans; EMIs to cost more

Mortgage lender HDFC, which is also India's largest housing finance company, on Monday increased its lending rate. The HDFC rate hike will be effective from today.

The move to hike interest rates comes ahead of RBI's fourth bi-monthly monetary policy review.

"HDFC has increased its retail prime lending rate (RPLR), on which its adjustable rate home loans are benchmarked, by 10 basis points, with effect from October 1, 2018," HDFC said in a statement to stock exchange.

In August, HDFC had increased its interest rates on home loans by 20 basis points, soon after RBI's Monetary Policy Committee (MPC), voted for a hike in key repo rate by 25 basis points (bps) to 6.50 per cent. Several other banks had also increased their marginal cost of lending rates (MCLR).

The Reserve Bank of India (RBI) is likely to increase the repo rate by 25 basis points in the upcoming monetary policy review as inflation is expected to accelerate further due to higher crude prices and the weakness in rupee.

The monetary policy committee will start its three-day meeting from October 3.

Repo rate, short for Repurchase Rate, is the rate at which the RBI lends money to commercial banks against the pledge of government securities, whenever the banks are in need of funds to meet their day-to-day obligations.

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