Threatening moves

FEBRUARY 13: One has got to hand it to ICICI as the latest entrant into the consumer and housing finance business. Its ferocious aggression is frightening the competition. We don’t know what it will do to ICICI’s bottomline, but at the moment it is certainly earning a lot of goodwill from borrowers. Car finance rates have already dropped a hefty 2 percentage points, but it is in housing finance, dominated by HDFC, that will probably see the fiercest battle.

HDFC which rules the home loan business got a taste of things to come at an exhibition that it co-sponsored last month with the Maharashtra Chamber of Housing Industry. ICICI which was just one of the participants announced that it would not only process documents right at its stall, but would do slash processing charges to a nominal Rs 1,000. Our source says that the offer ensures there was no standing room near the ICICI stall while HDFC’s counters looked rather forlorn.

Until now, HDFC has remained largely impervious to competition in the housing industry, but an aggressive ICICI with an equally good brand recall may force it to rework its strategies.