Srei BNP Paribas raises benchmark lending rate by 25 bps to 17.25%

KOLKATA: Srei BNP Paribas, an infrastructure and construction equipment financing company, has raised benchmark lending rate by 25 basis points to 17.25% a year with immediate effect following a rise in its borrowing cost.

The company said it was expecting the Reserve Bank of India to cut policy rate in the June policy review and the decision to keep the rate unchanged disappointed it. Srei BNP Paribas is a 50:50 joint-venture between Srei Infrastructure Finance Ltd and French banking giant BNP Paribas.

"We were looking for some interest rate cooling off in the recent RBI policy announcement which didn’t happen. We had no choice but to increase our rate," DK Vyas, chief executive of Srei BNP Paribas was quoted saying in a press statement released Monday.

"Srei BNP Paribas had decided to wait and look for a trend of increasing borrowing cost before it decided to pass on the incremental borrowing cost to its customers to maintain a healthy margin," Vyas said.

The company had last raised the rate in November last year by 100 basis points. The company said it enjoys a 30% market share and has a 28,000-strong client base.