Indian savers and consumers are going strong. “We have seen a 24% growth in home loan disbursement in the current financial year (Q1FY- 10) starting from April till now. Post June, we could give a sanction of Rs 700 crores in the last four months from April till July and net repayment has grown by Rs 600 crores,” said M D Mallya, Deputy chairman, IBA & Chairman and Managing Director, Bank of Baroda. The industry is expected witness a 20% growth in home loan disbursement next quarter, according to sources.
The key drivers to growth have been lower interest rates (down to as low as 8%) combined with the lower real estate prices. Housing Development Finance Corporation Limited has reported Rs 12,259 crores loan approval till June 09 compared to Rs 9,996 crores during the corresponding period in the previous year. “We have noticed 23% growth in the last quarter and we expect a good growth in next quarter too,” said Renu Sud Karnad. Jt Managing Director HDFC Ltd. She also added, “Our objective this year is to grow our approvals and disbursements by at least 20% and we are confident to achieve this objective.” According to Reserve Bank of India, this year the industry reported 5.0% growth in home loan disbursement during May 2009 while last year during the same period, it reported 13.8% growth.
As the festive season approaches, banks are reducing home loan rates further. As a festive offer, Canara Bank has cut down home loan rates by 0.25%, which is applicable from tomorrow. “We expect the home loan off take to improve during the festival season,” said A C Mahajan, Chairman and Managing Director, Canara Bank. - Pallabika Ganguly