Financial Daily from THE HINDU group of publications
Tuesday, Sep 30, 2003
Financial Daily from THE HINDU group of publications Tuesday, Sep 30, 2003 |
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Money & Banking
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Housing Finance DHFL housing arm reverts bad loans to ING Vysya Our Bureau
Chennai , Sept. 29 ING Vysya Bank received Rs 4.35 crore to take back bad loans from its erstwhile housing finance arm that had been acquired by Dewan Housing Finance. At a press conference on Monday, Mr R. Nambirajan, Managing Director, DHFL Vysya Housing Finance, indicated that "fictitious advances" were a reason for bad loans accumulated by ING Vysya Bank's erstwhile housing finance arm. At a broader level, Reserve Bank of India sounded a note of caution in its Annual Report, 2002-03, in the matter of bank lending towards home loans. A DHFL Vysya press release said that the company had paid ING Vysya Bank Rs 4.35 crore to take the bad loans on its books. DHFL Vysya's gross NPA is 0.5 per cent of its housing advances at present (HDFC had a gross NPA level of 0.92 per cent in March 2003). Before the transfer of bad loans, DHFL Vysya had a gross NPA of about 3 per cent, said Mr Nambirajan. Industry hands said fake transactions had been unearthed in the past wherein loans were made on the basis of fake documentation. RBI had sounded a note of caution on the issue of documents too in its Annual Report. Dewan Housing agreed to buy 85.91 per cent equity stake in ING Vysya's housing finance subsidiary, Vysya Bank Housing, for Rs 23.9 crore in January this year. Since then, Dewan Housing's stake has increased to 91 per cent and the company has been renamed, DHFL Vysya Housing Finance. According to Mr Nambirajan, DHFL Vysya would function as a stand-alone entity. It would complement its parent, Dewan Housing, in the matter of geographical expansion. DHFL Vysya plans to open 4-5 branches this year to add to its existing 13 branches. The company has an outstanding loan portfolio of Rs 175 crore at present.
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