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HDFC, banking arm in cross-selling pact

Calcutta, Sept. 17: HDFC Ltd and HDFC Bank will shortly enter into a commercial agreement for selling each other’s products.

Talking to the newspersons here today Keki M. Mistry, managing director of HDFC Ltd, said, “We do not want to merge the two companies. We will cross sell our products.”

Both the entities have agreed to the idea. A commercial agreement will be signed soon. This will turn out to be a profitable proposition for both the companies. “It will be a merger without a legal merger,” Mistry said.

While HDFC is only into housing finance, HDFC Bank is into personal banking, loans, credit card, private banking, fixed deposits, mutual funds and others.

HDFC is also on the lookout for a good portfolio. “We will carry out a due diligence. If we find that the asset is good we will buy the portfolio. Our total business is Rs 43,000 crore and our non-performing asset is only Rs 160 crore after 25 years of operations. We cannot allow asset–liability mismatch also. So we have to be very cautious before buying assets,” he said.

Mistry said that HDFC has fixed a growth target of 25 to 30 per cent in the current financial year.

During the first quarter of the current financial year the loan approvals of HDFC aggregated to Rs 2,104.62 crore as compared with Rs 1,593.12 crore during the corresponding period of the previous year representing a growth of 32 per cent.

Disbursements during this period amounted to Rs 1,607 crore as compared with Rs 1,225.43 crore in the corresponding period last year, representing an increase of 31 per cent.

Approvals and disbursements of loans to individuals during the first quarter of the current year were higher by 35 per cent and 37 per cent respectively compared with the corresponding period of the previous year.

Mistry was in the city to address Fintech 2002, a seminar on the financial sector organised by the Confederation of Indian Industry (eastern region).

While talking on reforms in the financial sector, Mistry said several issues in the housing sector need to be addressed.

These are — tenancy laws, foreclosure norms, better tax reforms, mortgage-backed securities, pension and provident fund, streamlining of the building approval process and introduction of real estate mutual funds.

Others who spoke at the seminar are Ashok Lahiri, director, NIPFP, Sushil Khanna, IIM, Calcutta and Omkar Goswami, chief economist, CII.

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