State-owned non-banking financial firms Power Finance Corporation (PFC) and REC will reduce lending rates by up to two percentage points from April 1, 2021.
"PFC and REC as group companies have been aligning operations to realise synergies. As part of such effort, PFC and REC have now decided together to reduce lending rates up to two percentage points," PFC said in a statement.
The new lending rates will be effective from April 1, 2021.
This initiative was undertaken to offer competitive rates, in line with the rates being offered by peers in the market, it said.
This will also help PFC and REC continue their business growth going forward in addition to maintaining reasonable spreads, it added.
The reduction in lending rates will help both PFC and REC offer lower rates to power utilities, which will reduce their borrowing costs, thereby reducing their interest payments and benefitting the end consumers in terms of lower tariff, it said.
PFC and REC, under the power ministry, are the prime financiers in the Indian power sector having a significant market share.
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