Mortgage major HDFC also cut its interest rate offering on Wednesday, making credit cheaper 0.05 percent to its customers. The 'best customers' having good credit histories will be now able to get new loans at 6.75 percent after the cut, irrespective of the home loan amounts, officials said.

The move comes two days after similar announcements by rivals SBI and Kotak Mahindra Bank, who are now giving home loans at 6.70 percent and 6.65 percent, respectively. "HDFC reduces its retail prime lending rate (RPLR) on housing loans, on which its adjustable-rate home loans (ARHL) are benchmarked, by 0.05 percent, with effect from March 4," an official statement said.

The change will benefit all existing HDFC retail home loan customers, it added. For the existing customers, the interest rates will get repriced 0.05 percent automatically on the existing interest rates. However, they will have to approach the lender if they wish to go as low as 6.75 percent. HDFC also said it will raise up to Rs 5,000 crore by issuing non-convertible debentures (NCDs) on a private placement basis. The issue will open on March 5, 2021 and close the same day. The base size of the issue is Rs 2,000 crore with an option to retain oversubscription up to Rs 3,000 crore, it added.

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