HDFC to hike lending rates by 50 bps

Mumbai, Mar 21 | Updated: Mar 22 2006, 06:15am hrs
In the wake of tight liquidity conditions prevailing in the market, Housing Development Finance Corporation ltd (HDFC) is once again planning raise its lending rates by 50 basis points. The housing fiance major which may also hike its deposit rates had revised its lending rates recently.

Speaking about the liquidity crunch, Keki Mistry managing director, HDFC said " There is short term liquidity tightness in the market and hence interest rate are in the upward trend. We would take in to account liquidity condition and then review the interest rates somewhere in next week."

Mr Mistry added that the liquidity crunch is due to heavy demand of credit which pushing up the interest rates.

Meanwhile IDFC has said that it would hike lending rates by 0.50 to 1% by April 1. "Due to the liquidity crisis, we will hike rates between 0.5 - 1 % by April 1," IDFC chairman Deepak Parekh said on the sidelines of the launch of India infrastructure initiative. He said though this rate hike is not going to make much difference, as IDFC may reverse it when the liqudity crisis gets over. "It would be a problem only when the interest rates go over 14-15," he said.