With the work from home culture driving demand for slightly larger homes, interest rates on home loans hitting a record low and property prices have stabilised, it is indeed a good time for buyers looking to invest in a property. To discuss this, CNBC-TV18 spoke to Sumit Bali, president and head-retail lending at Axis Bank.
Bali said, “There is a lot of activity on the home loan. We have seen loan against property picking up again; specifically on the home loan side, our interest rates on mortgage, on home loans are record low and continues to get a bit lower every month.”
“The property prices have stabilized, but combine the property prices along with the interest rates being offered, the affordability is pretty much right up and is the best number we have seen, probably, in the last decade in terms of affordability index, and this entire work from home is also driving the demand for slightly larger homes. So demand has been strong and sustained,” said Bali.
After a phase of big corporate lending and consequent loan write-offs, banks have been doubling down on growing their retail books. The retail segment accounts for over 50 percent of Axis Bank's business and is seen as one of its prime growth drivers.
On retail, Bali said, “The overall retail book is largely driven by the secured side of the business, which are mortgages as well as auto. But on the unsecured side of the business, which is a personal loan, credit card, we have seen strong traction month-on-month (MoM), including the unsecured business installment loans, which shows a lot of working capital demand by small and medium enterprises (SME). We have seen these books growing month-on-month, the demand continues to be strong and as we enter the festive period, this will continue to keep growing.”
On loans and cards, he said, “The credit card or personal loan demand has been growing; auto loan also has been growing, but it's been constrained by supply-side issues, but the demand continues to be good. So we are clearly seeing an increase in card spends, demand for personal loans and demand for an auto loan as well as a home loan. So, all are increasing month-on-month for us.”
According to him, the bank is in the process of tying up with a few fintech (financial technology) players. “We are in conversation with a lot of them to offer the entire facilities, which are mutually beneficial to both the partners, us as well as the fintech company. So that's a very interesting, evolving space and we certainly want to be very significant in their field,” said Bali.
For the entire interview, watch the video
(Edited by : Dipika Ghosh)