After a gap of almost four years, the Reserve Bank raised its benchmark lending rate by 25 basis points to 5.5 per cent, making borrowing from the central bank costlier to contain inflation fuelled by the West Asia crisis.
“Some benefit will go to the lender because all of the borrowing of the lender is not on the repo rate. It is a combination of Marginal Cost of Funds-based Lending Rate (MCLR), commercial paper, refinance from National Housing Bank and non-convertible debentures,” Shukla told PTI.
Asked about the quantum jump in margin improvement for the mortgage firm, he said the benefit will not be 25 basis points immediately on the book, but it may be 5-8 basis points.
Talking about the demand for housing finance, Shukla said, “We have seen some good traction…Momentum is already there. Usually the mortgage business starts picking up from Ganesh Chaturthi…so H2 (second half) of the financial year is going to be much better than the first half”.
Meanwhile, received a rating upgrade from to AAA/Stable from AA+/Stable. With this upgrade, PNB Housing Finance now holds AAA ratings from all four leading domestic credit rating agencies — Crisil, India Ratings, and , across relevant long-term instruments and facilities.
This will bring down the cost of borrowing, especially term loans from banks, which are 40 per cent of total resources, Shukla said.
Besides, he said, lower cost of borrowing would translate into cheaper loans for customers.
The successive rating upgrades underscore the sustained strengthening of the company’s financial and operating fundamentals, including improving asset quality, strong capitalisation, enhanced profitability, a granular retail-focused mortgage portfolio, and a diversified funding profile, he added.
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