We will see how things settle after RBI rate cut and then take a call: Renu Sud Karnad, HDFC

The rate cut is good for the retail customer. Had it been a much higher drop, I would have said that it is a little too much, Renu Sud Karnad, MD, HDFC, tells ET Now.

Edited excerpts:

Would you say the rate cut was along expected lines? The stance is extremely dovish at that and there is a 25 bps cut as well.

Very honestly with inflation and oil prices down, with RBI’s open market operations being effective, I would not say it is not a surprise. One was thinking that there could be some drop and that's why I think it is good. When interest rates come down, it is always good for the consumer. As you know we are into affordable housing. Every quarter per cent just helps customers either raise more money or be able to manage the EMIs better.

Should this be seen as a complete U-turn in terms of the stance being accommodative going ahead? How much support does the market need from the RBI?


As I said, with inflation down and things moving in the right way, it is good for the retail customer. Had it been a much higher drop, I would have said that yes I think it is a little too much. Also, in last few months, at least in our segment, interest in housing has come back. As we know, housing is a great barometer for the economy and it really pushes interest in construction. Overall, it should be a good thing.

Is it the first among a series of rate cuts? How many do you expect?

I wish I could tell you that but I personally think before the end of the year we should not see more than a quarter or so.

Are home and auto loans set to get cheaper at HDFC?

It always happens. It takes time for our cost of funds to come down and the whole system to settle. In the past, we had always passed on rate cut benefits. But very honestly, it is not going to happen tomorrow, or next week. We will just see how things settle and then take a call.