Banks outsmart HFCs in home loan segment: FICCI survey

NEW DELHI OCT. 28. Banks have outsmarted housing finance companies by cornering 65 per cent of the home loan market, which grew by a whopping 76 per cent to 51,673 crore last fiscal, a FICCI survey said today.

"Banks, despite being late entrants, have overtaken the HFCs in the home loan market. The share of banks in total home loan disbursements has risen from 43.6 per cent in 2000-01 to 65.5 per cent in 2002-03," the survey carried out on 47 banks and HFCs said.

ICICI Bank and State Bank of India are the leaders in the home loan segment among banks while HDFC and LIC Housing Finance are front-runners among HFCs.

According to the National Housing Bank data, the total home loan extended amounted to Rs. 33,841 crores in 2002-03 last fiscal against Rs. 14,745 crores in 2001-02. HFCs could increase their loan disbursements to Rs. 17,832 crores last fiscal from Rs. 14,614 crores in 2001-02, it said.

Total loan disbursements by banks and HFCs grew by 76 per cent to Rs. 51,673 crores in 2002-03. The segment grew by 31 per cent in 2001-02.

Tax rebates, falling property prices, interest rate cuts and greater amount of professionalism among builders have given a boost to the Indian housing market, the survey said.

Referring to rate cut war, the survey said "The advantage banks have in terms of access to cheaper funds over HFCs has helped them reduce interest rates on loans".

Despite high growth in home loans, the FICCI said "there still exists vast potential that remains untapped. The mortgage-GDP ratio in India is low at 2.5 per cent as compared to developed countries where it is between 25 per cent and 60 per cent".


Recommended for you