HSBC and Kotak Mahindra Launch Semi-Fixed Home Loans to Deploy Surplus Liquidity
· Business · Economic Times
HSBC and Kotak Mahindra Bank have started offering semi-fixed home loan products in India to deploy surplus liquidity from a record mobilisation of foreign currency deposits. The surge in liquidity followed the RBI's FCNR(B) swap scheme, mobilising $136.4 billion in forex inflows by August 31, including $127.2 billion through FCNR(B) deposits. HSBC's product offers a three-year fixed rate starting at 7.50% and a five-year fixed rate at 8.25%, before switching to the prevailing floating rate linked to the repo rate. Kotak Mahindra is offering a hybrid home loan at 7.60% fixed for up to 65 months, after which it switches to a floating rate. Banks are also considering routing surplus funds into government securities as they seek assured returns to protect lending margins.
Why it matters
Home loan borrowers in India may benefit from rate certainty for three to five years while surplus liquidity in the banking system pushes banks to offer more structured fixed-floating hybrids, though borrowers will eventually face floating-rate resets tied to repo moves.
Read the original report — Economic Times
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