New Industrial Development Bank of India (IDBI) P P Vora wants to focus on housing finance in a big way.
Former National Housing Bank chairman, who took over the reins of IDBI on Tuesday, sees growth opportunity in housing finance which has been growing 25-28 per cent per annum. "The growth rate is likely to continue. For IDBI this is an opportunity to capitalise on the potential of the sector," he said.
Universal banking is high on the priority list of Vora. However, the immediate agenda is to bring down the non performing assets (NPAs) level to below 10 per cent from 14.82 per cent. He, however, did not indicate any timeframe for bringing down the NPA level.
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IDBI has decided in-principle to go in for universal banking and Boston Consulting Group is charting the roadmap for it.
Stressing on re-positioning IDBI, Vora said that the medium term roadmap focused on universal banking and that the institution would look at segments of the industry, which are fairing well and show growth potential. Vora identified pharma, telecom, infrastructure, housing and urban development, where " we will lend more, as these are growing sectors".
Citing the reasons for focusing on the housing sector, he said the outstanding housing loans as percentage of GDP in India stands at just 2 per cent, and that NPAs in this sector is negligible at less than 2 per cent. IDBI would be attracted to this sector in view of the coming new innovations in the area of mortgage-back securitisation, and the fact that the Reserve Bank of India has allowed the risk weightage on housing to be cut from 100 per cent to 75 per cent.
The institution has been without a wholetime CMD since the end of January this year when G P Gupta retired. During the interim period, S K Chakrabarti and S K Kapur were the acting CMDs. Vora's tenure is up to September 30, 2003.