New Delhi, Aug. 14 -- The Reserve Bank of India's proposed changes to loan interest-rate rules could reduce pricing flexibility for large prime housing finance companies (HFCs), while leading to faster transmission of changes in bank lending rates to non-banking financial companies (NBFCs), Kotak Institutional Equities said in a report.

Kotak said the proposed framework could affect HFCs that currently use an internal prime lending rate (PLR) and offer home loans at a discount to the benchmark.

Under the new structure proposed by the central bank, floating-rate loans would have to be priced above the benchmark. This could reduce the flexibility lenders currently have under the "PLR minus" model.

The brokerage said large HFCs in the pri...