SBI GEARS UP TO MEET DEMAND FOR AFFORDABLE HOME LOANS

State Bank of India (SBI), the country’s largest lender, is gearing up to meet an expected rise in demand for affordable home loans across India by deploying additional resources and rolling out a quick approval process, according to two senior executives of the bank.

“If you go by PMAY (Pradhan Mantri Awas Yojana) eligibility, we feel that more action is expected in smaller cities. In that direction, we are training our people across the country, on explaining the scheme and how the bank can create awareness and tap potential customers,” said Vaijinath M.G., chief general manager real estate and housing business unit.

Following the merger of five associate banks, SBI has got an opportunity to deploy additional resources in marketing and sales of home loan products, he added.

With uncertainty related to the implementation of Real Estate Regulatory Authority (RERA) Act behind it, coupled with the usual festive season demand, the bank is expecting a rise in loan demand mainly from first-time buyers, Vaijinath said.

In addition, since the interest rate subvention scheme for middle-income groups under the PMAY housing scheme is valid till 31 December, there is an added incentive for home buyers to seek loans.

Buyers are equally warming up to the idea of affordable housing with a steady increase in the sales number.

In the June-quarter, the affordable segment, or properties priced below Rs25 lakh, made up around 17% of overall housing sales in eight cities including Mumbai Metropolitan Region, Delhi-National Capital Region, Ahmedabad and Chennai, according to property advisory firm Liases Foras. During the quarter, a total of 10,890 housing units in this segment were sold.

Vaijinath said that while demand from top cities account for the bulk of its home loan business, demand from smaller cities is also growing.

Cities such as Nagpur, Indore, Bhopal, Lucknow, Kanpur, Jaipur and Vizag could potentially see a rise in demand for affordable housing, said Pankaj Kapoor, managing director, Liases Foras.

He said that supply of affordable housing is mainly expected to come from government agencies rather than private builders, who tend to focus on tier-I cities and their peripheral areas.

“Even in smaller cities of the north-eastern market like Itanagar and Agartala, where we are conducting surveys, there is no builder supply but still there is a housing market where people either buy constructed houses or buy land and construct. That’s where home loan opportunities also emerge for lenders,” he said.

Given the shortage of housing, demand is expected to be exponential for the sector, industry experts say.