ICICI Bank has scrapped a proposal to sell its home loan subsidiary ICICI Home Finance, and is now working on a plan to boost the business by focusing on small loans in semi-urban and rural centres.
Private investment firm TPG Capital had been in talks with ICICI for acquiring the home loans arm, which is a non-banking finance company. But stiff conditions set by TPG — which wanted leads for loans to come from ICICI Bank even as it sought curbs on the bank’s entry into geographies where the home loan firm operated — derailed the deal, a source close to the development said.
ICICI Home Finance, which has a capital of ₹1,600 crore and a loan book of ₹10,000 crore, now plans to ramp up its business by spreading into newer territories.
“ICICI Home Finance is now present in 400 locations which will increase to 1,000 in another 18 months. We plan to increase our loan book size to ₹30,000 crore in three years,” Anup Bagchi, chairman ICICI Home Finance, who is also the executive director of ICICI Bank, told The Hindu .
ICICI Home Finance targets loans with an average size of ₹10 lakh to ₹12 lakh as compared with large banks and mortgage players where the average ticket size is about ₹30 lakh.
New CEO
Anirudh Kamani, who was heading rural banking in ICICI Bank, has been appointed as the CEO of the home finance arm.
Following the introduction of the Prime Minister Awas Yojana, a credit linked subsidy scheme, there has been a spurt in home loan demand as the effective interest rate for small ticket home loans is as low as about 4.5%.
