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HDFC `keen' on private banks

Our Bureau

CHENNAI, Dec. 14

MR Deepak Parekh, Chairman, Housing Development Finance Corporation Ltd, has categorically stated that HDFC is not involved in acquiring any bank, but indicated that it would be interested in new private sector banks if the price was right.

Mr Parekh felt that against the backdrop of the growing market, HDFC would concentrate on organic growth. This presented lesser problems than integration which was not always easy, he said.

However, he did not entirely rule out acquisitions in the future. Promoters' price expectations were high and were a disincentive. But in the face of the increasing competition, size does matter, and acquisition of new private sector banks were always an option.

He was talking to presspersons on the occasion of the inauguration of a HDFC branch here.

The South, particularly Tamil Nadu, was a major growth centre for HDFC. It had 11 branches in Tamil Nadu, and two more will come up shortly at Nagercoil and Hosur. It had 19 offices in the other southern States. Land and building cost was still affordabl e here, and the market was growing at 30-40 per cent annually.

This year's sanction towards housing loan was Rs 7,000 crore, with 10 per cent in Tamil Nadu, compared to Rs 5,500 crore last year.

Apart from its own growth HDFC was in the process of building up its offshoots in insurance, mutual fund and banking. In January or February, it will open a new insurance branch in Chennai. It was planning more products in insurance, such as mortgage-lin ked redemption policy.

It was in discussion with Standard Life Insurance Company Ltd to offer it a 26 per cent stake in HDFC Mutual Fund in which HDFC holds 100 per cent equity, he said. The fund has mobilised over Rs 650 crore under its three schemes, the growth fund, income fund and liquid fund at the time of its launch.

Mr Parekh said that HDFC had tied up with TCS for setting up information technology-enabled backoffice operations. It was likely to set up a 2,000-seat facility. HDFC had set up a smaller 600 seat operation in Mumbai, he added.

Picture: Mr Deepak S. Parekh, Chairman, HDFC, and Mr Deepak M. Satwalekar, Managing Director and CEO, HDFC Standard Life Insurance Company Ltd, at a press meet in Chennai on Thursday.

Picture by Shaju John