September 12, 2019
The Hindu Business Line

HFCs await more clarity on external benchmark linked home loans

With the Reserve Bank of India mandating banks to link fresh retail and SME loans from October 1 to an external benchmark, the pressure is now on housing finance companies and non-banking finance companies to match the rates. “HFCs do no not have that window of repo, then linking with that is not correct. Also the liability of HFCs, which include term loans, NCDs or capital market borrowings do not get changed immediately like repo rate. So it does not look like a possible choice to benchmark with repo,” said Pavan K Gupta, CEO, Muthoot Housing Finance, adding that HFCs they will differentiate themselves from banks by being more customer service oriented.


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