Loan book will continue to grow between 15-18%: HDFC

A: I doubt it very much. You cannot rule out a possibility of 5-10 bps drop in rates over the next few months depending on how interest rate pan out but I think Reserve Bank of India (RBI) is done with cutting rates, so with the kind of message we are getting from RBI, it is very unlikely to see any big significant drop in rates.

What you have to look at from the perspective of a home buyer today is that interest rates are probably at the bottom but more importantly the fact that the property prices haven't gone up; it's not that they have come down but at least if you negotiate with the builder you will get a good deal.

However, most importantly if you do not own a house and your income is less than Rs 150,000 a month then there is a big subsidy that you get from the government and that is available only upto December 2017. So there is not that much time for someone to apply for a loan and buy a house.

Latha: A word about your own loan growth this year. How will it look like now that the rates are cut and also will your margins get crunched with these rate cuts?

A: I cannot answer the first question because we have never given a forward looking statement. All we have said and that I would like to reiterate that from a medium to long-term view, we would continue to look at the kind of growth that we have achieved in recent times which is typically 15-18 percent.

However, I will answer your second question on competition yes, there is competitive pressure in the market but I am very confident that rates will remain stable despite of competitive environment. The competition continues to be from three or four peers, all the smaller players who are there in the market, there are many lenders but they are not in our kind of lending; they are in different segment, their lending rates are a lot higher, they lend to certain categories of self-employed customer and they charge a much higher interest rates. We are not in that. Our competition continues with people like State Bank of India, ICICI Bank, Axis Bank.

Anuj: Is there is a lot of demand under Pradhan Mantri Awas Yojana (PMAY)?

A: A lot of people have applied for it. The awareness about the scheme is getting better and better as days pass. We have also been very actively meeting companies, meeting builders, meeting groups of people and talking about what the benefit is. So it is getting a fair deal of traction and my sense is that it is not very difficult.

Latha: Can you quantify the demand. Is it one lakh, ten lakh, ten million? How many homes are we looking at this year?

A: It is very difficult to quantify but take an average loan amount of Rs 35 lakh; on a loan of Rs 25 lakh or Rs 30 lakh, whatever be the loan amount the subsidy amount will work out to about Rs 275,000. If you take a subsidy of Rs 275,000 and if you assume theoretically that there are one lakh borrowers you can then calculate the total amount of the subsidy. One lakh is a big number.

Latha: I agree but there is a huge surge in the prices of cement stocks, housing finance companies, real estate companies. All of them in the hope that this PMAY is going to create a groundswell of demand for homes. Are you seeing that kind of a home demand?

A: I cannot comment on stock prices but I can say that now is the best time to buy a house. So if I was to looking to buy a house, and honestly I am looking to buy a house and therefore I am looking to buy a house now as we speak although I won't be availing the subsidy because my income is higher but having that I will be buying a house right now because interest rates are at the bottom and I do not see property prices remaining that low or going low any further from where they are now.