Sundaram Home Finance lowers deposit rates

Sundaram Home Finance, the home finance arm of Sundaram Finance Ltd, has revised the interest rate on deposits effective May 1.

For senior citizens, the interest rates on fresh deposits/renewals have been revised to 7 per cent (7.50 per cent earlier) per annum for 12 and 18-month period and to 7.25 per cent (7.75 per cent) per annum for 24, 36, 48 and 60 months.

The interest rate for individuals other than senior citizens has been revised to 6.75 per cent (7 per cent) per annum for 12/18 months and to 7 per cent (7.25 per cent) for 24, 36, 48 and 60-month tenures.

Sundaram Home Finance also accepts deposits from Trusts. The interest rate for Trusts stands revised to 6.75 per cent (7 per cent) for 12/18 months, 7 per cent (7.25 per cent) for 24 months and 7.25 per cent (7.75 per cent) for 36, 48 and 60-month tenures.

Strong growth in deposits

The company’s deposits grew more than 35 per cent in 2019-20 and it stood at ₹1,605 crore as on March 31, 2020.

“Fixed deposits continue to be an important part of our resource mobilisation programme. Last year, we saw strong growth in deposits with a net accretion of over ₹430 crore. Even during the lockdown period, we have been receiving renewal applications as well as new deposit enquiries,” said Lakshminarayanan Duraiswamy, MD, Sundaram Home Finance.

On the outlook for the sector, he said, “currently, it is difficult to predict how much of a demand impact Covid-19 would have on the real estate sector. We should remember that even before the lockdown, the real estate sector had a lot of headwinds. Hence, I expect the growth in retail home loans to be muted in the near term. While housing finance demand will mirror the demand for real estate, I do see a rise in mortgage loans in the short term.”

Lakshminarayanan said RBI’s initiative to provide additional lending support to the housing finance companies through National Housing Bank was a timely move.