Rate hike unlikely to derail affordable housing demand, says PNB Housing Finance chief
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Ajai Kumar Shukla, MD & CEO, PNB Housing Finance
The RBI’s latest 25‑basis‑point repo rate increase is unlikely to markedly reduce demand for affordable housing, says Ajai Kumar Shukla, Managing Director and CEO of PNB Housing Finance, who expects only a modest effect on borrowers’ monthly repayments.
A 25‑basis‑point rise means only a slight rise in EMIs for affordable‑housing borrowers, whose typical loan size is about ₹16‑18 lakh. On an ₹18 lakh loan, the extra cost is just a few hundred rupees per month, which is generally affordable,” he noted.
Shukla also downplayed worries about further tightening, noting that while some analysts expect 50‑75 bps of additional hikes, he foresees no more than a further 25 bps increase by FY27. “I don’t anticipate any move beyond a 25‑basis‑point rise for fiscal 2027,” he said.
Seasonal tailwinds
The festive period—covering Navratri, Dussehra, Diwali and year‑end celebrations—usually lifts income for self‑employed customers, enhancing their repayment ability and sustaining housing demand in the latter half of the financial year. Consequently, we do not anticipate a slowdown in loan growth,” Shukla added.
Shukla’s optimism is reinforced by government initiatives to expand affordable housing, including higher budgetary allocations that he expects will boost credit flow to low‑income homebuyers and reinforce overall housing‑finance demand.
Funding side
On the funding front, the lender noted that its recent upgrade to the top credit‑rating tier by all four rating agencies should gradually reduce borrowing costs. The advantage is expected to be modest—about 10‑15 bps—and will materialise over time rather than instantly.
PNB Housing Finance reaffirmed its focus on affordable housing while staying cautious about corporate lending and developer financing. The firm said it is well capitalised, with a capital adequacy ratio of roughly 27 %, and does not need fresh capital now. It also indicated that future growth will mainly stem from internal accruals and a measured expansion strategy.
Published on October 8, 2026
