The Delhi headquartered National Housing Bank (NHB) has reduced its prime lending rate and has brought it down to 10 percent, from the existing 10.5 percent. The Chairman and Managing Director of NHB, Mr. R. V. Verma announced the 50 basis points rate cut and said that it is expected that the reduction in prime lending rates will accelerate demand for home loans and make them more affordable for retail home loan borrowers.
He further explained the rationale behind the rate cut and said that the move will have an effect on all loans with floating interest rate which are linked to PLR.
NHB is a wholly owned subsidiary of Reserve Bank of India which refinances home loans providing institutions on their retail housing loans segments. Last fiscal, it recorded net profits to the tune of Rs. 387 crore, which is a 39 percent rise from the net profits recorded in FY 2010-11.
In the same year, it sanctioned loans worth Rs. 14, 464 crore which is an increase of 22 percent from the total loans disbursed in FY 2010-11 (Rs. 12, 035 cr).