GHMC Negotiates Lower Interest Rates on Rs 6,500 Crore Debt to Save Rs 250 Crore Annually

The Greater Hyderabad Municipal Corporation (GHMC) is holding negotiations with nationalised banks to refinance approximately Rs 6,500 crore in existing borrowings at reduced interest rates, a move projected to save the civic body upwards of Rs 250 crore each year.

The existing loans were taken to fund major civic infrastructure projects across Hyderabad, including the Strategic Road Development Plan (SRDP), the Strategic Nala Development Programme (SNDP), and H-CITI. These borrowings currently carry an interest rate of around 8.9 percent. Civic authorities are aiming to reduce the interest rate to around 7 percent.

GHMC Commissioner RV Karnan stated that multiple financial institutions have expressed interest in refinancing the debt portfolio. Several banks have submitted offers with interest rates hovering around 7.8 percent. Meanwhile, the original nationalised bank from which the corporation secured the loans has offered a reduced rate of approximately 7.4 percent. The civic administration continues to push for a rate closer to the 7 percent threshold.

At present, the civic body bears an estimated annual debt-servicing liability of roughly Rs 2,000 crore. Securing a lower interest rate through refinancing is expected to ease the financial pressure on the civic body's balance sheet significantly.

The refinancing initiative aligns with the state government's broader strategy to restructure outstanding municipal debt and manage financial liabilities across urban bodies while ensuring that capital allocation for essential infrastructure works remains uninterrupted.