The Hindu : IDBI Bank's unique home loan scheme

Online edition of India's National Newspaper
Wednesday, Feb 26, 2003

Business

Business

IDBI Bank's unique home loan scheme

By Our Special Correspondent

CHENNAI FEB. 25 . IDBI Bank has announced that it will launch of an innovative home loan scheme in Tamil Nadu at the forthcoming three-day exhibition here, beginning March 7.

The scheme will facilitate a customer get up to 110 per cent of the property value on a home loan.

This is claimed to be the first of its kind offer from any housing loan institution. Under the scheme, IDBI Bank will seek to satiate the end-to-end needs of a customer by providing a one-stop solution for all his `housing needs'.

In essence, the bank will provide financial assistance for the complete property value, stamp duty, registration and amenities such as car park, club membership, and additional fittings and fixtures. According to S. Kumar, Head, Retail Assets, the innovation rested on the additional 10 per cent given as personal loan to help a buyer furnish the house instantly.

A release from the bank said that the customer need to pay only a Re. 1 as his/her margin money through a credit card authorisation and the bank would give the balance amount. Mr. Kumar said the minimum loan amount would be Rs. 2 lakhs. The bank had also laid out a floor salary and ceiling on how much loan an individual could obtain.

Mr. Kumar did not see any loan taker running into trouble with the income-tax authorities despite the EMI (equated monthly instalment) paid by him/her would also cover a portion of the loan which would not strictly form part of the pure housing finance.

He informed presspersons that the bank had taken opinions from taxation experts in this regard.

To a question, Mr. Kumar said the bank had an internal provisioning norm for unsecured portion of the loan (10 per cent). The bank would make 100 per cent provision for this unsecured portion if the payment of an EMI was pending for over 90 days.

Mr. Kumar said IDBI Bank would like to double its housing loan disbursal to Rs. 300 crores a month. He also indicated that sooner the bank would spread its housing finance business to Tier II cities.

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