PNB Home Fi­nance

Banking Frontiers - - Highlights - Me­hul@bank­ingfron­tiers.com

Shaji Vargh­ese, Busi­ness Head at PNB Hous­ing Fi­nance, ex­plains the progress in the busi­ness and its driv­ers:

Shaji Vargh­ese: The end users in hous­ing sec­tor are en­joy­ing a fresh breeze of af­ford­abil­ity. With an ar­ray of gov­ern­ment led ini­tia­tives, af­ford­able hous­ing is set to be the growth driver of the hous­ing fi­nance in­dus­try. PNB Hous­ing is con­tribut­ing in a mod­est way, to­wards mak­ing the mis­sion of ‘Hous­ing for All’ and af­ford­able hous­ing a suc­cess. Dur­ing the year, the com­pany dis­bursed re­tail home loans worth `114.83 bil­lion. Al­most 20% of this com­prises loan size less than `2.5 mil­lion. Backed by healthy de­mand for af­ford­able hous­ing in tier 2&3 cities, PNB Hous­ing’s af­ford­able hous­ing loan book size grew by an over­whelm­ing 62%. We ex­pect this con­tri­bu­tion to get big­ger as we pen­e­trate fur­ther into smaller cities.

We opened 16 branches in FY2016-17 and wishes to con­tinue the ex­pan­sion plan.

What in­no­va­tive ways have you em­ployed for af­ford­able hous­ing in 2017-18?

We de­signed a spe­cial home loan scheme - Un­nati - for the as­pir­ing com­mu­ni­ties re­sid­ing in tier 2&3 cities, and sub­urbs of metro cities. For loans up to 25 lakhs, the in­ter­est rates of­fered are very com­pet­i­tive. We have fixed and float­ing in­ter­est rates start­ing at 8.5%. Un­der this scheme, salar­ied and self-em­ployed cus­tomers can ap­ply for a loan amount of up to `25 lakhs and can take loan up to 90% of the prop­erty’s mar­ket value. PNB HFC has fur­ther aligned its sourc­ing and un­der­writ­ing ca­pa­bil­i­ties to ef­fi­ciently cater to this seg­ment. For in­stance, Un­nati home loan scheme of­fers op­tion of fixed rate in­ter­est for 3, 5 and 10 years to shield the ben­e­fi­cia­ries of this scheme from mar­ket fluc­tu­a­tions.

What tech­no­log­i­cal up-gra­da­tions have you in­tro­duced in re­cent times?

PNB Hous­ing has adopted the power of tech­nol­ogy to pro­vide added con­ve­nience to its cus­tomers. The com­pany launched a self-ser­vice cus­tomer por­tal aimed at pro­vid­ing real-time up­dates to new as well as ex­ist­ing cus­tomers. New cus­tomers can get pre­lim­i­nary sanc­tion ba­sis the in­for­ma­tion pro­vided. Be­sides im­por­tant in­for­ma­tion such as IT cer­tifi­cates, EMI pay­ment sched­ules, etc, the por­tal also in­forms the cus­tomers about lat­est of­fers, new fea­tures, etc. Ad­di­tion­ally, we also launched a mo­bile app of cus­tomer ser­vice por­tal where in cus­tomers can now eas­ily ac­cess their ac­count de­tails and avail var­i­ous ser­vices at their fin­ger­tips.

Please state the NPAs with re­gard to hous­ing loans of your com­pany in 2016-17? What are the risk man­age­ment prac­tices of your com­pany?

The com­pany’s gross NPA stood at 0.22% of the loan as­sets as on 31st March 2017. PNB Hous­ing rec­og­nizes that sound risk man­age­ment is a key to long-term op­er­a­tional and fi­nan­cial sta­bil­ity. It has a well-es­tab­lished risk-man­age­ment struc­ture which has sig­nif­i­cantly con­trib­uted to the loan port­fo­lio. The com­pany’s sub­ject mat­ter ex­perts pos­sess ex­ten­sive knowl­edge of their ge­ogra­phies which en­ables them to as­sess cus­tomer’s re­quire­ments and of­fer them so­lu­tions within the broad frame­work of credit poli­cies. More­over, the stream­lined credit un­der­writ­ing, mon­i­tor­ing and col­lec­tion process has en­sured that PNB Hous­ing’s NPA is amongst the low­est in the in­dus­try.

Do you have any sug­ges­tions with re­gard to re­cent reg­u­la­tory pro­vi­sions/is­sues?

Gov­ern­ment has taken up many mea­sures dur­ing the year that have in­ducted sub­stan­tial pos­i­tiv­ity in the sec­tor. One of the big­gest is the de­ci­sion to be­stow in­fra­struc­ture sta­tus on the af­ford­able hous­ing seg­ment in the Union Bud­get of 2017-18. Other re­forms such as ‘Hous­ing for All’ by 2022, the Real Es­tate Reg­u­la­tory Author­ity (RERA), and GST are ex­pected to trans­form realty in the days ahead. How­ever, ap­pro­pri­ate im­ple­men­ta­tion will play a very im­por­tant role in the suc­cess of th­ese re­forms.

What is short to medium term out­look for the home loans for af­ford­able hous­ing in 2017-18?

We are cer­tainly see­ing green shoots across the coun­try in all ge­ogra­phies. Tier 2&3 cities are ex­pected to drive real es­tate de­mand backed by ini­tia­tives such as Smart Cities Mis­sion, Hous­ing For All, etc. A big por­tion of the af­ford­able hous­ing de­mand is driven by tier 2&3 cities and sub­urbs of tier 1 cities.

Shaji Vargh­ese ex­pects tier 2&3 cities to drive real es­tate de­mand in the coun­try

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