State-owned Non-Banking Financial Companies (NBFCs), Power Finance Corporation and REC Ltd have further reduced their lending rates for all types of loans by 40 basis points, according to an official statement.
Union Energy Minister RK Singh expressed satisfaction with the two companies’ continued efforts to reduce tariffs and remain competitive, the energy ministry said in a statement.
Singh said the continued reduction in lending rates by REC and PFC will help power utilities to borrow at competitive rates and invest in improving power sector infrastructure, thereby benefiting to the consumer with reliable and cheap energy.
Over the past year or so, the two organizations have reduced loan rates cumulatively by up to 3%.
In order to give a boost to renewable energies, where long-term financing is needed, the rates have been revised to 8.25%. The reduction in rates was possible due to the decline in the cost of borrowing by these organizations over the past year or so.
It is relevant that PFC and REC already provide short-term loans at interest rates as low as 6.25%.
Download the app to get 14 days of unlimited access to Mint Premium absolutely free!
