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Last Updated : Nov 22, 2018 03:39 PM IST | Source: CNBC-TV18

Good credit growth visible in home loans, demand not slowing: PNB Housing Finance

"Don’t think that the demand is slowing down at all,” said Sanjaya Gupta, Managing Director of PNB Housing Finance.


Apart of housing finance and non-banking financial companies' (NBFC) loans to builders could face hurdles as they are not backed by projects, sources close to Reserve Bank of India (RBI) told CNBC-TV18.

According to the sources, this could be true for close to 10 percent of all housing finance companies (HFCs) and NBFC loans. Sanjaya Gupta, Managing Director of PNB Housing Finance, spoke to CNBC-TV18 about the development and how it will impact the sector.

“Good credit growth is very much visible and there is an inherent demand and I think sticking to one’s fundamentals of acquisition underwriting and delivery with dignity will hold people in good state. So I don’t think that the demand is slowing down at all,” he said on November 22.


“We are a deposit taking housing finance company and we have seen a huge sort of upside on our retail deposits, we do about 10,000 deposit applications a month. The bank lines have helped us, the core CPs have also rolled over pretty nicely for us and liquidity for the company is not an issue but for the industry, I would say, liquidity is still a concern and people should be aware that if wholesale liquidity is not there then banks alone would not be able to supplement the total debt requirement of NBFCs and housing finance companies. So we have to look at wholesale debt capital market also, the corporate bond market,” he added.

With regards to the cost of borrowing, Gupta said, “I do recognise the fact that the cost of borrowing for an institution is rising much sharper than what we can pass on to our customers and hence there can be a slight dip because we should also realise the H2 interest incomes generally don’t get reflected in the same financial year. There is always a lag effect so I don’t think that the H2 is much under threat as far as spreads go. This is an annuity business, let us not look at it from a quarter-on-quarter (Q-o-Q) basis but on an annualised basis I am very sure that FY19 is going to be healthy and there might be a little bit of a compression of 10-15 bps but not beyond that,” said Gupta.

Source: CNBC-TV18
First Published on Nov 22, 2018 03:05 pm