Srei BNP Paribas raises benchmark rate by 50 basis points to 17.75 per cent

BANGALORE: Infrastructure and construction equipment financing firm Srei BNP Paribas on Monday announced a hike in its benchmark rate by 0.5 per cent, from 17.25 per cent to 17.75 per cent, with immediate effect.

The company's asset liability management committee after reviewing the cost of borrowing decided to increase its benchmark rate, Srei BNP Paribas in a statement said.

This has been necessitated because of the continuing increase in borrowing cost. Srei BNP Paribas had last increased its SBR in July 2012 by 25 basis points, it added.

Srei BNP Paribas is a 50:50 joint-venture between Srei Infrastructure Finance Limited and BNP Paribas, France.

"Increasing cost of borrowing has necessitated this increase in rate which is expected to increase further. This interest rate increase comes at a time when fund flow to the infrastructure sector has been slightly restrained by banks because of a host of issues affecting the sector," Srei BNP Paribas CEO D K Vyas said.

"However, our rate hike has become imperative to maintain the quality of our portfolio," he added.