IDBI Bank clubs life cover with its home loans

IDBI Bank today announced that it would provide the option of bundling life insurance cover to consumers alongside home loans, indicative of the intense competitive retail market conditions that prevail in the country.

This apart, IDBI Bank has also come out with an option of a five-year home loan at a fixed interest rate of 8.25 per cent.

"The insurance cover for home loans will involve a one-time single premium payment," Prashant Joshi, head (retail assets) of IDBI Bank said, at a press conference. The cost of the insurance cover will involve a one-time transaction fee of Rs 3,000, apart from the insurance premium on the cover.

The schemes involving insurance cover and the fixed rate home loan option will be launched for the first time in the country at Hyderabad tomorrow at Homes 2004 "" a mega property exhibition, Joshi added.

The IDBI Bank insurance cover for home loans is a group life insurance scheme where the bank will club its customers together so that it gets a better deal from the insurance company. The company that is underwriting the risk is Birla Sun Life Insurance Company Limited.

Under this scheme, a customer can insure himself up to a maximum amount of Rs 50 lakh with the maximum tenure for the loan amount being 25 years.

IDBI is organising Homes 2004 from December 3 to 5, 2004 in the city. It will have property developers from all over the city showcasing their latest projects. It was earlier organised in Bangalore, Chennai and Mumbai also, where IDBI Bank sanctioned loans worth Rs 600 crore. IDBI is targeting to sanction loans worth Rs 140 crore at the Hyderabad exhibition.

To keep pace with competition, IDBI Bank is also planning to launch two-wheeler and commercial vehicle financing in the beginning of the next fiscal.

"We are still in the process of finalising plans and have not decided on the non-banking financial company or the insurance company that we will tie-up with," Joshi said.

It is also planning to introduce personal loans in Vijayawada and Vizag in a month's time and is targeting to have 125 branches across the country by March 2005. The bank has 110 branches at present.

The bank's retail assets have reached Rs 4,500 crore in the last 18 months with home loans comprising Rs 4,000 crore, personal loans against security being Rs 400 crore and unsecured personal loans being Rs 100 crore. "Andhra Pradesh contributes to around 10 per cent of our total business," Joshi said.