Friday, 22 April 2016

IndusInd Bank all set to foray into affordable housing loans

IndusInd Bank is all set to foray into the affordable housing finance business and will be launching its first product in this segment by the end of the current quarter, Sumant Kathpalia, head – consumer banking, said after the bank’s March quarter results were announced.


IndusInd Bank is all set to foray into the affordable housing finance business and will be launching its first product in this segment by the end of the current quarter, Sumant Kathpalia, head – consumer banking, said after the bank’s March quarter results were announced.
“We have identified affordable housing as the correct avenue to venture into home loans. Typically, home loans are a product which does not really bear any fruit for the company unless the book is around R10,000 crore or more. But with affordable housing, we could achieve that with a R 2,000-crore book,” Kathpalia said.
In order to provide a fillip to the affordable housing market and to make it easier for individuals to finance their plans of buying a house, the Reserve Bank of India announced in October last year that lenders could lend up to 90% of the price of a house that costs R30 lakh or less. For houses costing between R30 lakh and R75 lakh, the loan-to-value (LTV) ratio was fixed at 80%, while for houses costing above R75 lakh the LTV was fixed at 75%.
At present, IndusInd Bank does not give home loans on its own. In fact, the bank has partnered with Housing Development and Finance Corporation and originates loans for the mortgage lending major. Kathpalia said that foraying into the affordable housing market will also help the bank meet its priority sector lending targets.
“We have a whole team working on it at the moment. We have everything ready to go and we will put our first step in that direction by the end of this quarter,” he said, adding that the new avenue will help the bank cross-sell more of its products.
“The cross-sell into our own clients’ infrastructure will give us the money. The contract-for-difference business for example, is a real cross-seller,” he added.

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