Pnb Housing Cuts Rates 0.25-0.50 Bp

PNB Housing Finance Ltd - a wholly owned subsidiary of Punjab National Bank - has reduced interest rates on housing loans by 0.25-0.50 basis points for various slabs.

The revised interest rates are applicable from May 10, 2000, PNB Housing Finance managing director R Nambirajan.

"We have reduced interest rates on housing loans for residents and non residents Indians for various slabs by 0.25 per cent to 0.50 per cent," he said.

The revised interest rate on 15 years housing loans up to Rs 15 lakh is 13 per cent and for loans above Rs 15 lakh are 13.5 per cent.

 

The company is also giving housing loans for a period of 16 to 20 years. The revised interest rates for 16-20 years loans are between 13.25 per cent to 14 per cent for various slabs, according to Nambirajan.

PNB Housing's decision to cut interest rates on individual housing loans came close on the heels of the government increasing the tax exemption limit for interest paid on housing loans to Rs 1 lakh from Rs 75,000.

The company had already reduced its interest rate before National Housing Bank (NHB) had announced interest cut on refinance to banks by 50 to 100 basis point and was contemplating to reduce it further by 25 basis point after the NHB announcement.

NHB had slashed its interest rates on refinance to banks, housing finance companies (HFCs) and other primary lending institutions by 50 to 100 basis points adopting a uniform rate of 12 per cent for Rs 50,001-10,00,000 slab.

PNB Housing Finance had already announced a cut in the interest rates on individual housing loans from 14 per cent to 13.25 per cent, effective from March 27, 2000.

The PNB Housing Finance is following a single slab structure for individual loan ranging between Rs 2 lakh and Rs 10 lakh.

Under no circumstances can we slash our interest rates to below 13 per cent as our borrowing rate from NHB is 12 per cent. And at 0.5 per cent of administration cost, our margin remains very thin, Nambirajan said.