The Board of Pune-based NBFC Bajaj Finance Ltd has given its approval to the formation of a Housing Finance Company, as a wholly owned subsidiary.
The company will now apply to National Housing Bank (NHB) for the Housing Finance Company license, it said in a statement.
Bajaj Finance Ltd is the lending arm of Bajaj Finserv Ltd, and started its mortgages business in 2008. It currently offers home loans for SMEs and salaried customers and loan against property to SME customers.
The company also offers consumer loans, business loans and loans against securities amongst other lines of lending. The mortgages business forms about 40% of the company’s loan book.
“The advantages doing a housing loans business in a housing finance company include additional avenues of borrowings, lower risk weights for certain class of loan, easier legal repossession, Rajeev Jain, CEO said.