SREI holding on to lending rates

SREI Infrastructure Finance, an infrastructure non-banking finance company,  today said it will not reduce its lending rates even as banks are on an interest rate cutting spree.

"We will hold the interest rates for now... We don't want to take a knee-jerk reaction on things," SREI Chairman and Managing Director Hemant Kanoria told PTI.

He said that the company had actually decided to raise its benchmark interest rate by 150 basis points in its Asset and Liability Committee meet last week, but did not do so after RBI cut cash reserve ratio and short-term lending rate.

Kanoria said unlike banks, the company doesn't have a short-term lending and therefore it cannot take decision on reducing interest rates as easily as banks can.

 

The decision of the company comes at a time, when public sector banks have already started reducing their interest rates.

Country's largest lender State Bank of India today announced cutting prime lending rate (PLR) by 75 basis point to 13 per cent. Other PSU banks, including Canara Bank, Bank of India and Bank of Baroda, have also slashed their PLR by 0.75 per cent.

Other lenders which have reduced their interest rates include Punjab National Bank, Union Bank of India and IDBI Bank.

At present, Kanoria said the benchmark rate of the company is 14.50 per cent and SREI will study the market trends before taking any decision on the interest rates.

"We, being a medium- to long-term lender, don't have any short-term lending in our books and so we can not keep on reducing interest rates on a daily basis... We do it on a six month or yearly basis," he said.