LIC Housing Finance today hinted at reducing lending rates on home loans following the RBI cutting short-term interest rate by 0.25 per cent in third quarter monetary policy review.
"Immediately after this RBI (decision to reduce policy rates), our Assets Liability Management Committee will sit and examine to what extent and to what percentage (of) benefits be passed onto the customers. Whenever RBI had cut interest rate in the past, we have passed (benefits) onto the customers in a very transparent manner," LIC Housing Finance, Director and Chief Executive, V K Sharma told reporters here.
At present, LIC Housing Finance's interest rate on home loans stands at 10.25 per cent per annum while its Prime Lending Rate (PLR) is 14.4 per cent.
Earlier today, the RBI cut its short term lending rate by 0.25 per cent to 7.75 per cent after a gap of 9 months.
Welcoming the RBI's move as a positive and bold one, Sharma said the reduction in repo rate by 0.25 per cent would benefit both industry and (retail) customers.
"It is a very positive and bold move of RBI. It tried to balance both growth and inflation and it will benefit the entire industry, customers and lenders," he said.
He further said after the decrease in short term policy rates, all the lending institutions would like to pass on the benefits to their customers.
"The cost of borrowings for all lending institutions will come down and ideally they would like to pass onto (the benefit) to customers," he said.
With over 8 lakh customer base in the country, LIC Housing has loan portfolio more than Rs 70,000 crore, said Sharma.
Despite a slowdown in country's real estate market, LIC Housing Finance has recorded 20 per cent growth in its disbursement so far. Promoted by Life Insurance Corporation in 1989, the company has targeted to disburse fresh lending to the tune of Rs 25,000 crore by current fiscal end.