Housing finance company HDFC on Tuesday announced a reduction in its retail prime lending rates (RPLR) by 50 basis points (bps) from March 25.
This is the second time in three months that HDFC has reduced its RPLR. With this reduction, the RPLR has been brought down by 100 bps since December.
“We have over the last few months seen that the measures taken by the government, drop in interest rates, correction in property prices and developers introducing affordable housing by resizing the area have resulted in an increased interest from first-time house buyers,” HDFC joint managing director Renu Sud Karnad said explaining the rate cut.
The advantage of the RPLR reduction will accrue to all the existing floating rate customers over the next three months based on their respective reset dates, a company statement said.
Interest rates on existing loans to non-resident Indians have also been reduced, it added.
HDFC reduced its deposit rates across maturities earlier this month. On an incremental basis, retail deposits for the first nine months - April-December 2008 - formed 55 percent of HDFC’s funding requirement, the statement said.
Source: The Economic Times
Indian Market News, news
Bank, deposits, Development, floating rate, HDFC, Interest rates, Lending rates, Loans
Today the Indian government announced a higher than expected borrowing plan. This caused panic in the market where the participants had taken huge positions following the rate cuts done by RBI last week. The bond yield had touched its all-time low of 4.86 percent intra-day on Monday. The 10-year benchmark bond yield closed at 5.87 percent on Wednesday 7-Jan-2009. Thursday is a holiday for the markets.
The government has said that it would issue 500 billion rupees ($10.3 million) of fresh bonds by March with 150 billion rupees of bonds to be auctioned on Friday. The government has already borrowed 1.77 trillion rupees of bonds this year compared to 1.5 trillion rupees last year.
But this rise in yields seems like a temporary reaction to Fridays auction. With inflation expected to ease further and interest rates to decline, this rise might just be the best opportunity to invest in bonds funds. The bond yields should start their downward journey soon.
Remember that bond yields have an inverse relation with the returns on bond funds.
Debt Mutual Funds
bonds, Interest rates, Mutual Funds
Punjab National Bank(PNB) has decided to raise its benchmark prime lending rate(PLR) by 100 basis points to 14 per cent with effect from 1st of next month, being country’s second largest public sector bank by assets PNB decided to hike its deposit rate by 75-100 basis oints across various maturities to make them more competitive in the market.
These decisions have been taken today looking at the extraordinar situation prevailing and to provide better returns to the depositors of PNB with the inflation rates at 12 per cent PNB said that they will not be able to induce the people to save unless they increase teh deposit rates.
Indian Market News, Results, news
Banks, deposits, inflation, Interest rates, PNB, Punjab National Bank, security deposits
1) Bank Rate kept unchanged at 6 percent.
2) The reverse repo rate and the repo rate unchanged at 6 percent and 7.75 percent, respectively
3) CRR kept unchanged at 7.5 percent.
4) GDP growth projection for 2007-08 is 8.5 percent.
5) The policy endeavour would be to contain inflation close to 5 percent in 2007-08 while conditionig expectations in the range of 4-4.5 percent.
6) Loan growth slows; but money supply and aggregate deposits continue to expand well above indicative projections
Indian Market News
CRR, GDP growth, inflation, Interest rates, RBI
Citi Group has said that RBi is likely to cut the interest rates in first quarter of financial year 2008-09, They say that this is expected due to a slow down in bank credit, lower inflation, slow down in consumption and rate cuts by Global Banks however they say that RBI is unlikely to change the interest rates during the review of monitory policy on Jan 29th.
Indian Market News
Global Banks, Interest rates, RBI interest rates