Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) have further cut down their lending rates for all kinds of loans, by 40 basis points (bps).
The two state-run non-banking financial companies have managed to cut down lending rates due to their lower cost of borrowings. Both PFC and REC are already providing short-term loans at interest rates which are as low as 6.25 per cent, a statement issued by the power ministry said. .
Power minister R K Singh expressed satisfaction at the continued efforts by both companies to reduce rates and remain competitive, official sources said.
Mr Singh said that continued reduction of lending rates by REC and PFC will help power utilities to borrow at competitive rates and invest in improving the power sector infrastructure, thereby benefiting the consumer by way of reliable and cheap power.
In the last one year, both the organisations have reduced lending rates cumulatively by up to 3 per cent.
In order to boost renewable energy, where long-term funding is required, the rates have been revised to as low as 8.25 per cent during this period, official sources said.