Released on = February 15, 2006, 5:51 am

Press Release Author = GRUH Finance Ltd.

Industry = Financial

Press Release Summary = GRUH FINANCE LIMITED INCREASES RATES OF INTEREST ON ITS
LENDING PRODUCTS
AND DEPOSIT PRODUCTS


Press Release Body = GRUH Finance Ltd. - GRUH; NHB approved housing finance company
having its operations in Western India through its retail network of 65 offices and
outstanding loan portfolio in excess of Rs.1000 Crore has decided to increase Rate
of Interest on all its lending products and also on all its deposit products.

The increase in the lending rates for home loans on monthly variable rest basis
shall be of 75 basis points effective 1st March 2006. The existing lending interest
rates ranging from 7.25% p.a. to 8.50% p.a. shall be revised upwards to 8.00% p.a.
to 9.25% p.a. GRUH has also reviewed its lending interest rates on fixed rate home
loans. GRUH shall now offer discretionary fixed interest rates home loans in the
range of 9.00% p.a. to 10.25% p.a. and pure fixed interest rates home loans in the
range of 9.75% p.a. to 11.00% p.a. GRUH has also revised its lending interest rates
for customers who opt for loan on an annual rest basis and also on daily rest basis.


GRUH has also decided to increase interest rates on the existing outstanding loans
under the variable rate options by 75 basis points. As a result, all existing
customers who have been servicing loans under variable rate options will be required
to service their loans at the interest rate higher by 75 basis points effective 1st
March 2006. In most cases, the impact of the revised interest rates would be
reflected by way of extension in the tenure of the loans and the customer will
continue paying the same monthly installment.

GRUH has also decided to further increase its deposit interest rates by 50 basis
points across all options for various tenures, effective 22nd February 2006. GRUH
had increased the interest rates on deposits by 25 to 50 basis points just a month
back on 23rd January 2006. Thus the effective rise in the interest rates on public
deposits shall be by 75 to 100 basis points.

GRUH has been compelled to raise its interest rates on loans and deposits on account
of the hardening of interest rates experienced in the money market over the past few
months. Following the Credit Policy announcement in the last week of January 2006 by
RBI, the increase in the cost of funds has been very steep.

Following the Credit Policy review by RBI, even National Housing Bank (NHB) has
increased its refinance interest rates to Housing Finance Companies by 50 basis
points. Secondly, NHB has also reduced interest subsidy on rural housing by 25 basis
points whereby the effective rise for GRUH on its refinance rates has been to the
tune of 75 basis points.

Apart from the rise in the borrowing costs, GRUH has also experienced additional
burden on its cost of capital on account of the increase in Risk Weight by NHB from
50% to 75% on home loan products effective 1st October 2005 and 125% on financing of
commercial products effective 1st January 2006.

The borrowing costs from banking sector also have gone up by almost 200 basis points
over the last six to nine months period. Even the benchmark CP rate for 90 days
paper has moved from 5.80% p.a. in October 2005 to 7.75% p.a.

All these developments over the past few months have affected the overall cost of
borrowings for GRUH. GRUH has, therefore, decided to increase its deposits and
lending interest rates.


Web Site = http://www.gruh.com

Contact Details = GRUH Finance Limited
\"GRUH\", Netaji Marg, Near Mithakhali Six Roads,Ellisbridge,Ahmedabad-380 006.
Tel:079-30901222