Sbi Home Aims At Rs 200 Crore Disbursement This Fiscal

SBI Home Finance Ltd, the home finance arm of State Bank of India, has set a disbursement target of Rs 200 crore in the current fiscal. "We will grow at 45 per cent per annum in the next couple of years," said SBI Home managing director C Narasimhan.

"Our strategies have started showing results. This was reflected in the first four months disbursement figures of the company. Generally, disbursement and sanction at the beginning of a fiscal are traditionally low, but SBI Home managed a Rs 65 crore figure in the first four months against Rs 60 crore achieved for the whole of 1999-2000," he said.

 

The company would be reworking its product range to suit consumer requirement. "We will launch a new product every alternate month to cater to home loan requirements of every segment of the population," explained Narasimhan. With competitive, and lower interest rates in certain cases, the company would be able to regain its position as a major market player in five years.

SBI Home's last product was the 'Double Your Loan Scheme', a variant of the 'Home Retire' scheme aimed at cash rich individuals like VRS takers. The scheme, a combination of deposit and loan component, would allow individuals to avail of a loan of 200 per cent of the amount deposited with the company against tax rebates and option to revise interest rates. The product also allowed withdrawal of a part of the deposit after a lock-in period of five years.

SBI Home would focus on customer friendly products which can be broadly divided into three categories - home building loans, loans related to homes, and hybrid products with deposit as well as loan components. While, bulk of disbursals would be for home building, a sizeable chunk was also expected to go into home related financing.

To service bulk customers, SBI Home would extend special lines of credit to corporates and large promoters. Defaults at SBI Home has declined from 5.5 per cent a year ago to four per cent this year. Narsimhan said it would be brought down to 0.5 per cent in another two years.

For better customer servicing, SBI Home would be centralising its data base and networking all branch offices. Networking would enable the company to service clients from any office in the country. "We would be also enhancing our reach over and above the existing 23", said Narsimhan. Eight branches would be opened every year, the target being around 55 offices in three years. A few satellite centres are also in the pipeline.

The company has asked for Rs 100 crore recapitalisation from its promoters. It would also be restructuring its fixed deposits and retiring costly borrowings with lower cost ones for increased spread. It would also be raising deposits at current rates of interests. "We would like to enhance our asset base to Rs 2000 crore four years from now," added the managing director.