Teaser loans may be on their way out, but that isn?t preventing financial intermediaries from offering housing loans.
Shriram City Union Finance (SCUF) is planning to float a housing finance subsidiary which will be headed by Sujan Sinha, who was was earlier VP (retail assets) with private sector lender Axis Bank.
Arun Duggal, chairman, SCUF, confirmed Sinha?s move. ?It will be a 100% subsidiary of Shriram City Union Finance with a capital base of Rs 100 crore,? said Subhasri Sriram, ED & CEO, SCUF. ?We are floating a separate entity to ensure that there is no asset liability mismatch as home loans are long-tenure loans. It will also ensure that we get access to refinance and other sops from NHB from time to time. We have a good market share and we can leverage the existing customer base,? added Sriram. The subsidiary, to be operational by March 2011, will cater to middle-income customers so that the ticket size of loans should be around Rs20 lakh. ?There is good growth potential in the semi-urban and smaller centres. We will target these,? added Sriram.
The Shriram Group is present in the financial services space through its various subsidiaries that offer commercial vehicle financing, life insurance, consumer and small businesses financing, retail broking and chit fund business. The group has been keen to enter the banking space once RBI issues final guidelines on the entry of new players. In this pursuit, the group is looking to diversify and grow its consumer and small businesses financing subsidiary, SCUF. At present, SCUF offers loans for two wheelers, used autos and CVs, gold and small businesses, apart from personal loans.