HDFC has joined other lenders in raising its benchmark lending rate by 25 basis points, a move that will make loans dearer for both existing and new borrowers. The upward revision by the mortgage lender, which is the second hike this month, comes on the heels of the Reserve Bank of India (RBI) raising the repo rate by 50 basis points to 5.40 per cent on Friday.
The change in the policy rate led to banks either raising lending rates linked to an external benchmark such as the repo or the marginal cost of funds-based lending rate (MCLR).
“HDFC increases its retail prime lending Rate (RPLR) on housing loans, on which its adjustable rate home loans (ARHL) are benchmarked, by 25 basis points, with effect from August 9,” the largest housing finance company said in a statement.
This is the second hike by the corporation this month after an increase of 25 basis points that came into effect from August 1. The RBI had first raised the repo rate in an off-cycle meeting in May by 40 basis points from 4 per cent.
It was followed by two consecutive revisions of 50 basis points each in the subsequent meetings of the monetary policy committee (MPC). This is the sixth increase undertaken by HDFC in three months. HDFC follows a three-month cycle to reprice its loans — the loans will be revised based on the date of the first disbursement to a customer.
HDFC has also received approval from the National Housing Bank (NHB) for its merger with HDFC Bank, a regulatory filing said on Tuesday. Banks are also expected to raise their deposit rates albeit with a lag after the RBI decision.
Shriram Transport Finance Company has announced that it will raise the fixed deposit rates by up to half a percentage point across tenors with effect from August 10. The new interest rates will apply on deposit tenures between 12 months and 60 months. Account aggregators The RBI has given in-principle approval to eight fintech entities to operate as account aggregators.
Walmart-backed PhonePe Technology Services, NSDL e-governance Services, Tally Account Aggregator Services and Digio Internet have received the approval. The others are Dashboard Account Aggregation Services Pvt Ltd, Unacores AA Solutions Pvt Ltd, Agya Technologies and CRIF Connect.
Already six entities have gone live as aggregators. AA helps banks leverage data acquired digitally through customer consent. It has three key participants— the Financial Information User (FIU), Financial Information Provider (FIP) and the aggregator.
FIP has the individual’s data, while FIU wants the data. The aggregator provides the data with the individual’s consent. The ecosystem eliminates the need for physical documentation in financial transactions such as loans.
Forex services
The RBI has relaxed the norms for small finance banks (SFBs) by allowing them to offer more forex products to their customers. In a notification, the RBI said all the scheduled SFBs, after completion of at least two years of operations as authorised dealer category-II, will be eligible for authorised dealer category-I licence. A category II dealer can provide services such as letters of credit and bill of exchange among others.
