Country’s largest lender State Bank of India has set an ambitious target of disbursing Rs 250 crore of home loans every day during the ongoing festive season, which currently stands close to Rs 200 crore.

After it waived off the processing fee late September as part of its festive offering, the bank is disbursing close to Rs 200 crore home loans every day.

“The home loan disbursement is going up each day. It was Rs 130 crore in the beginning when we scrapped the processing fee. Then it moved up to Rs 150 crore, and then Rs 175 crore, and has now stabilised at Rs 188 crore a day. My target is Rs 250 crore a day,” managing director for national banking and group executive B Sriram told PTI in an interview.

Year-to-date, the home loan sanctions stood at Rs 20,032 crore as against Rs 18,500 crore a year ago, he said, constituting around 14 per cent uptick year-on-year.

In percentage terms, the growth is 14-15 per cent year-on-year in the first half, he said, adding, “we are hopeful that it will become 18-20 per cent in the current quarter.”

Stating that the bank has not launched any scheme during the festive season but has waived off the processing charges on car and home loans, Sriram said from the last week of September the bank was seeing quite a traction on loan queries and disbursals.

On the average ticket size, Sriram said it is improving and it is Rs 30-32 lakh now and the focus is to take it to Rs 50 lakh.

“We are focussing on high value home loans because now almost 80 per cent of our home loans are below Rs 50 lakh. So we are not very much in the above Rs 50 lakh segment. And above Rs 75 lakh we are just 12 per cent. So we need to improve that and have also brought down interest rates on par with the other segment. This is one focus areas now. We need to push the average ticket size to about Rs 50 lakh,” Sriram said.

Impact of processing fee waiver on auto loans

On the impact of the processing fee waiver on auto loans, Sriram said, “In the first week of September we were giving 700 to 800 car loans a day but on September 30, the total was 3,400 loans. Because last week we saw quite an increase — some 1,500-3,400 loans a day.”

“Every day there was a jump of 300-400 cars. Since then because of holidays it has come back to 800-1,000 cars, but again improved from October 15 onwards. We hope this trend to continue till the rest of the quarter,” he said.

This is despite the fact that after five successive months of sales growth, car sales slipped 1.03 per cent in September to 1,54,882 units year-on-year. But motorcycle sales climbed 19.34 per cent to 10,56,509 units, according to SIAM data. But vehicle sales across categories rose 20.44 per cent to 19,04,007 units in September.

It can be noted that despite the general weakness in credit growth for the system, which has been hovering at 10-11 per cent for quite some time, there was come pick in mortgage loans, especially by retail customers.

HDFC growth

For instance, the pure-play mortgage leader HDFC which reported a 7.2 per cent jump in net profit in the September quarter at Rs 1,358 crore, was driven primarily by a healthy growth in individual loans which clipped at 23 per cent or 71 per cent of its total loans sold in the quarter.

Growth in the non-individual loan portfolio stood at a low 11 per cent. The growth in the total loan book inclusive of loans sold is 19 per cent.

For HDFC, a whopping 81 per cent of the incremental growth in the loan book during the period came from individual loans.