BackLIC Housing Finance plans foray in banking sector
LIC Housing Finance plans foray in banking sector
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New Delhi: LIC Housing Finance, an arm of LIC, on Friday said it is planning to foray into the banking business and is awaiting guidelines from the Reserve Bank of India.
“We are awaiting guidelines from RBI for banking. If we are eligible we will go for it," LIC Housing finance chief executive officer R R Nair said.
“I think there is no reason why we should not be eligible because we have got 21 years of work experience in the financial services, Rs3,400-crore networth along with more than 200 offices across the country," he said on the sidelines of Property Expo held at Pragati Maidan here.
The RBI is expected to come out with a discussion paper on new norms, for granting banking licences to private sector companies and non-banking financial companies by July end.
Finance minister Pranab Mukherjee had announced in the Union Budget that the government was open to allowing more private entities and NBFCs into the banking sector.
“The RBI is considering giving some additional banking licenses to private sector players. Non Banking Financial Companies could also be considered, if they meet the RBI’s eligibility criteria," Mukherjee had said.
LIC Housing Finance is a subsidiary of LIC, which has 36.5% stake and 32% is with foreign institutional investors.
Besides, Nair said, the company is going to launch venture capital fund with the objective to invest in real estate in the next 3-4 months.
The first fund would be about Rs500 crore, he said, by adding, it would be raised from the domestic market.
Fund size is expected to grow up to Rs4,000 crore in the next 3-4 years depending on the opportunity, he added.
The company also plans to set up Property Services division to provide end-to-end solution to customers this year itself, he said.
The division would help home buyers from right from finding property to house warming, he said, adding, services would include providing loan assistance.
Talking about the business done in the last fiscal, Nair said, the company had disbursed loan worth Rs15,000 crore during the year ended March 2010, registering a growth of 70%.
This year we are expecting loan disbursal to be around Rs20,000 crore, he said.
Capital Adequacy Ratio stood at 15% with Net non performing assets (NPA) of 0.12% and Gross NPA of 0.69%.
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