New Delhi, Mar 31 (IANS): State-run power sector finance companies, the Power Finance Corporation (PFC) and the Rural Electrification Corporation (REC), will reduce lending rates up to 2 per cent from April 1.

The Navratna CPSEs under Ministry of Power, as group companies, have been aligning operations to realise synergies.

"As a part of such effort, PFC and REC have now decided together to reduce lending rates up to 2 per cent," PFC said in a statement.

"This initiative was undertaken to offer competitive rates, in line with the rates being offered by peers in the market. This will also help PFC and REC to continue their business growth going forward in addition to maintaining reasonable spreads."

According to the statement, the reduction in lending rates will help both PFC and REC to offer lower rates to power utilities, which will reduce their borrowing costs thereby reducing their interest payments and in turn benefitting the end consumer in terms of lower tariff.

"The lending rates will be effective from 1st April, 2021."