Housing Development Finance Corp (HDFC Ltd) is looking to link interest rate to external benchmarks, reported The Economic Times. The mortgage lender, the report said, is looking to link both loans and liabilities as this will protect interest margins.

“We will still examine such loan products in our next asset-liability committee (ALCO) meeting to be held in the next two weeks… We would come up with external benchmark-linked loan products only when we are able to match the same mechanism on our liabilities side,” HDFC vice-chairman Keki Mistry was quoted as saying in the report.

The lender, the report added, is likely to engage in aggressive trades in interest-rate swaps and exchange fixed-rate payments for floating rates.

Last week, the RBI has made it mandatory for banks to link retail loans like housing and automobile loans to an external benchmark. The regulation is not mandatory for housing financing companies.

HDFC’s total assets under management rose 13 percent to Rs 4.76 lakh crore as of June 30, report said.

As per the report, it meets nearly half of its fund requirement through debt securities while public deposits form over 30 percent of the borrowing book.