Even as overall credit growth for the banking sector continues to grow in single digit, the housing sector witnessed a 19 per cent rise in the number of new accounts across banks and housing finance companies, led by fresh demand for houses in the sub Rs 10 lakh loan category.
Speaking to the media on Monday, Sriram Kalyanaraman, MD and CEO of National Housing Bank (NHB) also called for rationalising of stamp duty by the states and said that they should be brought down from current levels of 6-12 per cent.
“Currently, they range from 6-12 per cent in some states and it is very high. I think that pushing the stamp duty down will increase the transactions and then there should be no loss of revenue for states…. If we can rationalise it and bring it down to around 2 per cent all inclusive, it would help,” said Kalyanaraman, adding the duty should be inclusive of all duties paid to the state for acquiring a house.
Crediting the government’s initiatives for rise in demand, the NHB head said the industry’s focus is shifting towards affordable housing segment and even supply comes under its ambit. “It is probably for the first time that loans of under Rs 10 lakh with both banks and HFCs accounted for over 30 per cent of the total loans. The focus is definitely shifting towards the lower segment of the market,” said Kalyanaraman.
He said that during the year loans were sought for more than 16 lakh units (by both banks and HFCs) and the outstanding loans now is in the range of Rs 10 lakh crore. While the growth rate for the year stood at 19 per cent, NHB expects the growth in FY’17 to be 18 per cent. Pointing that there is a slowdown in the higher ticket size category, he pointed that the growth is likely to be driven by the affordable housing segment as a lot of developers are now launching projects in that segment. States are also pushing approvals.
“Some of the state governments are moving much faster on clearances and hence things are moving fast. I understand that in Gujarat the approval time has come down to 3 months, Madhya Pradesh has brought in online approvals and even Delhi has moved to single window clearance,” said Kalyanaraman.
Announcing NHB’s annual results for the year ended June 2016, the MD of the housing finance regulator said that organisation has become a nil net NPA organisation as it managed to recover around Rs 170 crore from a couple of large accounts. While the net NPA for the NHB was 0.32 per cent in June 2015, it stood at 0 at the end of June 2016. The organisation even witnessed a 6 per cent rise in its net profit from Rs 746.6 crore in June 2015 to Rs 791.8 crore in the year ended June 2016. He pointed that there has been a rise in interest from housing finance companies in the light of the government’s focus on housing for all and said that NHB gave out 11 licenses during the year as against 6 in the previous year and has another 8-10 in the pipeline.
“The interest has come out primarily in the light of PMAY and the incentives that the government is giving for low cost housing,” said Kalyanaraman adding that the total licenses as of June 2016 stands at 75.
While NHB is the nodal agency for implementation of Pradhan Mantri Awas Yojana – Credit Linked Subsidy Scheme under Housing for All, NHB has to date signed MoUs with 145 Primary Lending Institutions for loans to be given under economically weaker section (EWS) and low income group (LIG) category.