Mumbai: The country’s largest housing finance company HDFC Limited has brought down its lending rate by 20 basis points with effect from April 13. Following the reduction the bank will extend loans at 9.9% which is lower than what is being charged by State Bank of India.

The reduction in interest rates will bring down the equated monthly installment on a Rs 50 lakh loan (20 year tenure) by Rs 663. The equated monthly installment on the loan which was Rs 48583 under the earlier rate will come down to Rs 47,920.

In a statement issued here on Friday, HDFC said that the reduction would benefit all customers and the interest cost for existing borrowers will also go down.

The country’s largest bank SBI offers home loans at 9.95% for women and 10% for all other borrowers.

Although ICICI Bank has brought down its base rate by 25 basis points it is not clear whether there will be a corresponding reduction in its home loan rate which stood at 10.1%. Sources said that the bank is reworking spreads on its home loans which would be announced on Saturday.

Speaking to ToI, Keki Mistry, vice-chairman and CEO, HDFC said that the reduction in lending rates was an outcome of the reduction in the cost of funds for the corporation.

HDFC has also reduced interest rates on its fixed deposits across maturities. The reduction in the RPLR will also be applicable on loans to Non-Resident Indians (NRIs).

All major banks had reduced their interest rates this week despite Reserve Bank of India governor Raghuram Rajan keeping rates on hold in his monetary policy on April 7. While Rajan held rates, he admonished banks for not passing on the earlier rate cuts to borrowers.