The Hindu Business Line : ABN Amro enters home loans with 'super saver' offer

The foreign bank's move to enter the housing loan segment with such low rates is expected to trigger another rate war among banks and housing finance companies.

Mr Ramesh Sobti, Executive Vice-President & Country Representative, ABN Amro Bank , India (left) with Mr. Nitin Chopra, Head-Consumer Banking at the launch of "ABN Amro Bank Home Loans" in the Capital on Monday -- Ramesh Sharma

New Delhi , Oct. 20

ABN Amro has entered the highly competitive housing loan segment with the launch of its Super Saver Loan Package.

Under the scheme, the bank will offer an interest rate of 6 per cent in the first year and 6.5 per cent in the second year and from the third year it will offer loans at the then prevailing floating rate.

According to the Executive Vice-President, Mr Romesh Sobti, loans between Rs 1 lakh to Rs 1 crore would be offered.

The bank is targeting at least 10 per cent of the Rs 50,000 crore home loan segment.

Under the Super Saver scheme, the equated monthly instalment (EMI) is about Rs 717 per lakh for a 20-year loan. The scheme will be available till December 31, 2003.

The bank's move to enter the housing loan segment with such low rates is expected to trigger another rate war among banks and housing finance companies.

"We are targeting our existing clients and consumers in nine major cities. We will extend it to 25-30 cities in two-three years," Mr Sobti said.

Apart from the promotional scheme, Mr Sobti said the bank would offer housing loans at floating rate of 7.75 per cent and a fixed rate of 8.25 per cent. The bank will re-price its floating loans every six months, while fixed rates would be revised every three years.

"We want to be amongst the top five players with over 10 per cent market share," Mr Nitin Chopra, Head of Consumer Banking, said.

The bank has tied up with ICICI Lombard General Insurance to provide property insurance to home loan clients.

It would also offer its Smart Gold credit card to the borrowers free of joining fees and concessional rates on personal loans and auto loans.

ABN Amro will also offer a refinance facility, which would enable the bank to take over the entire loan outstanding that a customer has with another bank or housing finance provider.

MF foray any time now

AFTER housing loans, ABN Amro is eying the mutual funds market. It has already received approval from the Securities and Exchange Board of India (SEBI) to start a mutual fund with a $5 million corpus.

The bank will also induct partners in the venture. While the bank will hold a 75 per cent stake in the asset management company (AMC), the rest will be held by private companies.

"Our plan to foray into mutual funds is ready. I hope it will be done by December 31, or latest by March end," Mr Romesh Sobti, Executive Vice-President said on the sidelines of its maiden housing loan scheme launch in Delhi.

He added that the AMC would come up with debt, equity and a balanced scheme to start with.

On other expansion plans, Mr Sobti said that acquisitions were on the cards,

He, however refused to divulge names. The bank was also looking beyond the present nine cities and eying another 25-30 cities. However, it ruled out entry into the pension sector.

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ABN Amro enters home loans with 'super saver' offer