Gruh Fin set to raise home loan rates by 25 bps

Ahmedabad-based Gruh Finance Ltd is likely to review its home loan rates in the January and the hike in rates is expected to be around 0.25 per cent on both fixed and floating rate loans.

The rate hike will be unlike the 0.50 per cent hike effected by other banks on home loans, because Gruh had earlier hiked its rates by 0.25 per cent in September, even as other banks and financial institutions were slashing home loan rates as part of various offers for the festive season.

As of today, Gruh offers two options on fixed rate home loans, one being the fixed rate irrespective of any changes in the economy, while the other is the discretionary fixed rate.

The monthly reducing discretionary fixed home loan rate, which could be revised in a year or three years, stands at 8.75 per cent, while the fixed rate stands at 9.25 per cent. The monthly reducing variable (floating) interest rate for home loans for a period of 15 years from Gruh today stands at 7.75 per cent.

"Gruh will consider reviewing its home loan rates in the fourth quarter of the current fiscal, possibly in January. This is because we had revised the rate in September by just 0.25 per cent," said Sudhin Choksey, managing director, Gruh Finance.

Even the National Housing Board (NHB) has hiked interest rate on refinance, including earthquake loans.

"NHB has effected a 0.25 per cent hike on its loans, including earthquake loans. We have taken up the matter with the NHB," Choksey stated.

Gruh Finance recorded a 22 per cent rise in profit after tax at Rs 3.60 crore for the first half of the financial year with Rs 2.95 crore for the half year ended September 30, 2003. On a quarter on quarter basis, second quarter profits showed a growth of 24 per cent at Rs 1.69 crore compared with a profit after tax of Rs 1.37 crore in the second quarter of the 2003-04 fiscal.

Individual home loan disbursements grew by 20 per cent at Rs 138.08 crore compared with Rs 114.31 crore for the corresponding period last year.

Gruh also disbursed Rs 3.06 crore under the special dispensation scheme for earthquake affected families in the state to 280 individuals in the first half of the current fiscal.

Gruh's asset base as on September 30, 2004, is Rs 779.15 crore. Loans, at Rs 730.06 crore, constitute 94 per cent of its total asset base. The individual home loan portfolio at Rs 704.76 crore forms 96.50 per cent of the total loans as on September 30, 2004.