Amidst rising rates and property prices, the banks and housing finance companies are gearing up to expand their housing finance business which is expected to double at R3 lakh crore by 2014-15.

MD Mallya, CMD, Bank of Baroda, said the bank has witnessed a growth of 24% in the home loan segment during 2010-11 and are expecting a growth of 24-25% during the current fiscal.

Except for the five-year tenure, the bank doesn?t offer fixed loans We offer repayment period of up to 25 years in the case of floating rates.

Mallya said the recent lending rate hike was only up to 50 basis points and will not affect the bank?s home loan business much.

?We have put in place retail loan factories to ensure the good credit originating on the front, hence the default rate was not much. Yes, we do see another round of rate hike by 25 bps,?? he said.

The demand for home loans mostly come from tier-II cities like Pune, Nashik and Nagpur. The demand from metro cities like Hyderabad, Coimbatore and Chennai is also continuing, he said.

MV Nair, CMD, Union Bank of India, said though the bank will see some impact on its home loan business due to rate hike, the interest rates are not only to blame. Rather, it is the high prices of the properties too that has emerged as a culprit ,he added.

The bank have take several steps including expediting processes of documentation and turnaround time for the sanction of loan to give a push to home loan business.

The process has been made easier through 45 existing Union Loan Points and we have plans to increase by 15 during the current fiscal.

Union Bank of India achieved a growth of 22% in the retail loan segment, which comprises home loan growth of 15.5% during the last fiscal. The bank has projected a target of 25% growth for its housing business.

?I do agree that the interest rates may further go up during next six months. Still, I am hopeful that it will start moderating post September,?? he predicted.

As on March 31, 2011, the bank had sanctioned home loan to the tune of R2,658 crore, and disbursed R2,567 crore. ?Our NPA in home loan was currently at 3.41%,?? Nair revealed.

A senior State Bank of India official said the bank recorded growth of 21.80% to R86,789 crore in housing loan business in 2010-11.

SBI?s total NPA in special home loan segment is at 0.40%.

?We are making our delivery mechanism modified one. We do see further rate hike in the range of 25-50 bps in home loan segment,?? the official said.

M Narendra, CMD, Indian Overseas Bank said as on March 31, bank?s home loan portfolio grew by 18% to R3,212.53 crore, Bank?s default in housing finance portfolio is approximately 2% which is at a minimal level.

A senior official from Punjab National Bank said bank?s home loan portfolio has grown by 24% to R12000 crore during 2010-11.

Nearly 44% of bank?s home loan business has come from 73 retail assets branches (RAB) during the last fiscal. However, the RAB?s have contributed only R50 crore in April.

Bank?s NPA in the home loan segment is currently at 1.82%. Bank has seen demand for home loan is the highest in down south like Chennai. However, there was a huge demand for affordable housing all across the country due to the rise in migration of labour.

Keki Mistry, CEO & vice chairman, HDFC, said the company is looking for a growth 20% in fiscal 2012, During 2010-11,individual approvals grew at 25% and disbursements grew by 27% compared with the previous year.

The demand for individual home loans continued to be robust, despite rising interest rates as there are other enabling factors including rising disposable incomes and continued fiscal incentives on housing loans.

During the year HDFC?s individual approvals grew at 25% and disbursements grew by 27%, compared with the previous year. HDFC?s average size of individual loans stood at R18.6 lakh.