Housing and Urban Development Corporation (Hudco) has drawn up plans to sell its retail housing loans -- Hudco Niwas -- through commercial banks. It would target banks who either do not have a housing finance portfolio or those banks where there would be no conflict of interests.
"We are looking at a possible relationship with various banks both for retail outlets and for repayment collection to increase the penetration of our Hudco Niwas product," Hudco chairman and managing director V Suresh, said. Though some tie-ups have already been finalised for repayment collection of housing loans, negotiations are still on for retailing the product, Suresh said.
He, however, refused to divulge further details.
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"Since it is not possible to open an office in each of the 5,161 cities in India, tapping the existing banking sector network will help us increase our reach substantially," Suresh said.
Hudco, at present, has about 40 offices spread across India. It plans to increase the number of offices substantially within this fiscal. "We are aggressively looking at extending our reach in the secondary cities of the country," Suresh said. Hudco would be opening offices in at least 2-4 top secondary cities of each state in the near future.
Hudco also announced a 75 basis point reduction in interest rates and 0.20 per cent decrease in processing and administrative fees, with effect from November 1. The move comes in the wake of the recent 50 basis point reduction in bank rate and 200 basis point reduction in the cash reserve ratio by the Reserve Bank of India (RBI). "We want to pass on the benefits of being able to raise cheaper resources to our customers," Suresh said.
It also announced setting up of property advisory services for assistance and guidance on purchase of residential plots, building houses and flats in association with public and private sector housing and real estate development agencies. It has already tied-up with agencies in various states including West Bengal and Maharashtra for the purpose.
Hudco Niwas has introduced a new loan slab of Rs two lakh to Rs 20 lakh at 11.75 per cent interest for five years repayment period, 12 per cent for 6-10 years repayment and 12.25 per cent for 11-15 years repayment.
Suresh said housing loans of over Rs 2,406 crore for 2,65,438 applicants have been sanctioned and over Rs 1,749 crore have been disbursed since its inception in March 1999.