Indiabulls Housing Finance Ltd. said that it has raised retail lending rates by 20 basis points to accommodate for the recent spike in interest rates in the economy.
"The increase in lending rates reflects the rise in the cost of funds," the lender said in a statement.
Loans of up to Rs 35 lakh will be disbursed at an interest rate of 8.8 percent per anum, while loans bigger than that will attract interest rates of 8.95 percent.
According to an official of the company who spoke on the condition of anonymity, the effective lending rates for builder loans have been increased by 100 basis points. The benchmark rate for such loans has been increased by 200 basis points to 14.9 percent, with effect from Oct. 1.
The effective lending rate is calculated by removing a margin from the benchmark rate, depending on the quality of the customer.
The cost of funds for non-banking finance companies has gone up due to a recent liquidity issue following the recent spate of bond repayment defaults by Infrastructure Leasing and Financial Services Ltd. The defaults led to rumours of a contagion risk in the economy.
Large banks like State Bank of India clarified that there is no drying up of liquidity in the NBFC market and that the bank would continue to finance good companies.
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