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IFCI lowers benchmark lending rate by 50 bps

Infrastructure financing firm IFCI has reduced its benchmark lending rate by 0.5 percentage points to 12.20 per cent with effect from Friday. ‘IFCI Benchmark Rate (IBR) has been reduced from 12.70 per cent to 12.20 per cent effective from Friday,’ IFCI Managing Director Malay Mukherjee said on Thursday.

‘It was decided in ALCO meeting to bring down the benchmark rate as cost of funds has come down. So, we decided to pass on the benefit to customers,’ he said. IBR was introduced in January this year and the rate was fixed at 12.70 per cent.

IFCI’s new benchmark rate is similar to the base rate of commercial banks, which is the lowest rate below which they do not lend to any individual or corporate. The state-owned firm expects business assets to grow by about 50 per cent to Rs 47,000 crore in the current fiscal. The company expects the net profit to go up to Rs 750 crore. Of this, Rs 200 crore is expected to come from treasury income. IFCI had posted a 13.57 per cent jump in profit to Rs 170 crore for the fourth quarter ended March, 2014.

It had a net profit of Rs 150 crore in the fourth quarter of 2012-13. Its total income in the period under review increased to Rs 830 crore, from Rs 735.38 crore in the year-ago period.
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