HDFC to keep rates stable even if RBI tightens policy

Home loan borrowers have something to cheer in the era of rising interest rates.

The country's largest home loan player, Housing Development Finance Corporation, said on Thursday it will not hike interest rates even if the central bank signals an upward movement in the monetary policy on July 27.

"Not at the moment. We have no plans to pass it (hike in policy rates) on," vice chairman and MD Keki Mistry said at the company's annual general meeting.

"We have already raised money at decent rates, which will enable us to maintain our spreads," Mistry said.

The comments come at a time market participants are expecting the central bank to increase policy rates to tame inflation. On July 2, RBI hiked repo and reverse repo rates by 25 basis points each.

HDFC has been aggressive in pushing its sales by offering competitive rates. It launched a new product in early July which charges a fixed interest rate of 8.25 per cent in the first year and 9.25 per cent in the second year.

The move followed State Bank of India's  decision to extend its fixed-cum-floating rate regime on June 30. SBI charges eight per cent on home loans in the first year and nine per cent in second and third years.

Speaking at the AGM, HDFC Chairman Deepak Parekh said residential real estate prices in the country were hitting the peak levels observed in the pre-slowdown period.