LIC Housing Finance, a subsidiary of Life Insurance Corporation, may rope in a consultant to advise it on its proposed foray into banking business.

"We may rope in a consultant for our proposed foray into the banking business, if that is required. This will happen after the final guidelines on banking licence is out by the Reserve Bank of India (RBI)," LIC Housing Finance Director and Chief Executive VK Sharma told PTI today.

He, however, declined to give any timeline for the appointment of the consultant.

The housing finance company had earlier evinced interest in entering into the banking business and is working towards this.

"We have constituted our board level committee. Also, the company level committee is looking into the issue," he said.

As per the RBI draft norms, private sector entities or groups owned and controlled by Indian promoters with diversified ownership, which have a good track record for a minimum of 10 years, would be eligible to promote banks.

Referring to the borrowing plan of LIC Housing Finance, Sharma said the company has set a target to borrow Rs 20,000 crore in the current financial year.

"We have already borrowed around Rs 11,000 crore and the rest will be borrowed depending upon the demand for housing loan," he said.

While 30% of the housing finance company's borrowings comes from banks, around 57% comes from issuance of non-convertible debentures and 4% from the National Housing Bank. Rest is managed from the parent group along with tier-II capital among others.

Sharma further said the company is planning to disburse around Rs 2,000 crore-Rs 3,000 crore of project loan in the second half of the fiscal compared to Rs 400 crore in the second quarter.

"The project level exposure will be done across the country. But, cities like Chennai, Bangalore, Kolkata are likely to see sound advances in this segment," he added.

LIC Housing Finance posted a 58% drop in its net profit to Rs 98 crore in the second quarter of this fiscal on the back of higher provisions required by the new regulations of the sector regulator.

Total income of the company increased by 37% to Rs 1,515 crore during this period.

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