IDBI may foray into housing finance

MUMBAI, SEPT. 5. In an effort to improve its asset portfolio quality, Industrial Development Bank of India (IDBI) is likely to foray into housing finance sector, newly appointed chairman and managing director, Mr. P. P. Vora, has said.

``The incidence of non-performing assets (NPAs) was as low as two per cent in the housing finance sector with an exposure of around Rs. 40,000 crores and it was expected to grow at 25-28 per cent in the future", Mr. Vora, told reporters after he assumed charge here today. He said there was an internal proposal for the foray into this sector, which has seen a growth of 25 per cent for last five years.

The Reserve Bank of India recently agreed to reduce the risk weightage for housing finance from 100 per cent to 75 per cent, Mr. Vora said adding this would in turn help lower the capital adequacy ratio requirement of the institution. He said India would need Rs. 200,000 crore investment in order to reach a 10 per cent mark of mortgage finance for housing finance.

Referring to the recapitalisation of IFCI, Mr. Vora said IDBI would stand by and honour whatever commitments made earlier of contributing its share to the Rs. 1,000 crore bail out package.

On IDBI's mounting NPAs, the new IDBI chief said ``We will work to contain the degree of bad assets on an urgent basis and immediate priority is to scale them down from the current net 14 per cent to below 10 per cent".

- PTI

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