New Delhi, Aug. 20: The Indian unit of Dutch banking major, ABN Amro, has increased its thrust on retail banking to boost profitability as it plans to introduce retail loans for home purchases.
Corporate clients account for 70 per cent of ABN Amro’s loan portfolio. Bank officials say retail advances will equal the corporate loan portfolio by the end of the current fiscal
“Our housing loans would carry an attractive rate of interest,” Nitin Chopra, chief of the bank’s consumer banking division told reporters during the launch of a ‘personal loan’ product, which would attract nearly 17 per cent rate.
The housing sector is a big market with little risk and is fuelled by the steep fall in interest rates by the Reserve Bank of India, which has cut its key lending rate by 500 basis points in the last five years.
Banks are, therefore, shifting focus on housing sector. On an average, housing comprises nearly a third of a bank’s retail advances. Rates charged on these advances hover between 8-10 per cent for a term period between 5-20 years.