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PRAGATI FINANCE: Ms Naina Lal Kidwai, Group General Manager and Country Head, HSBC India, and Mr Ravi Subramanian, Head, HSBC Pragati Finance, at a press conference in Mumbai on Wednesday. - Paul Noronha

Mumbai , Oct 4

HSBC Bank will hike home loan rates from 9-9.25 per cent to 9.50-9.75 per cent (floating rate) effective October 6. Fixed rates on home loans will remain unchanged at 11 per cent.

Currently, home loans account for 65 per cent of HSBC's retail portfolio. It is the third time the bank has increased its rates this year, the previous 50 basis point hikes having come in April and July.

Mr Nicholas Winsor, Head of Personal Financial Services, HSBC India, said that the bank would increase its benchmark retail lending rate from 10.50 per cent to 11 per cent.

According to Mr Winsor, the growth in home loans has slowed down over the past year while that of personal loans has picked up.

The retail business contributes to 55 per cent of the bank's portfolio.

Ms Naina Lal Kidwai , Group General Manager and Country Head of HSBC India, said that the bank would focus on personal finance and SME sector lending.

To a question on her resignation from the global Nestle Board, she said: "Whatever we do will be as per RBI directives."

The bank today launched HSBC Pragati Finance, a product aimed at urbanites earning Rs 4,000-8,000 a month.

It bears an interest tag varying between 32 per cent and 48 per cent.

The loans with a maximum tenor of four years will range between Rs 10,000 and 50,000.

According to Mr Ravi Subramanian, Head of HSBC Pragati Finance, moneylenders usually charge 60 per cent a year.

If the borrower builds a good track record, the interest rate could come down to 18-20 per cent, he added.

The scheme will initially be applicable to individuals with a bank account and later to those without one.

Ms Kidwai said that as the bank builds a database and learns the market, the interest rates under Pragati Finance could drop further. The bank would then look at differential pricing strategies for various segments.

More Stories on : Housing Finance | Foreign Banks | Interest Rates

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