With demand for real estate picking up, General Insurance Corporation of India (GIC) Housing Finance is targetting disbursal of Rs 750 crore housing loans this year, a top official of the institution has said.
Due to economic slowdown, GIC's housing loan disbursement had been 'static', but it would pick up by the second half of this fiscal. Till september this year, the disbursal was Rs 290 crore, M Sivaraman, managing director, told reporters here last night.
Last year's disbursal was Rs 600 crore, he added.
Since August 2008, the demand for housing was stagnant, while there was large scale correction in price level of real estate sector. Prices of property have been corrected by 25 per cent ot 30 per cent in the market, Sivaraman said.
He added demand for housing was deteriorating due to existing prices in the real estate sector.
To woo more investors, GIC had introduced a limited period special scheme for festival season, from October this year, for all new individual housing loans up to Rs 1 crore. The rate of interest applicable for the period was 7.95 per cent for a 6 months period after which it would reset to the then prevailing base lending rate, he said.
Besides, free accidental death insurance cover and free property insurance cover would also be available to applicants, Sivaraman added.
On shift in demand from luxury to budget houses, he reasoned how builders were now concentrating more on budget segment since the correction in value was more in luxury segment.
Around 40 per cent of the business was from Maharashtra and GIC was spreading to tier II cities in the state. Three more offices would be opened this year in Indore, Baroda and Nasik.
An office at Nagpur was recently opened, he added, saying next year eight more branches were being planned. The next 5 years, GIC has plans to open branches in 100 locations across the country.
"In Kerala, GIC has disbursed around Rs 26 crore and the company was planning to grow at the rate of 25 per cent this year,"he said.
The NPA level was under control. Dring 2007-08, it was Rs 98 crore and during 2008-09, it could be reduced to Rs 90 crore, Sivaraman added.
