India Post Payments Bank and LIC Housing Finance to provide home loans
India Post Payments Bank (IPPB) and LIC Housing Finance (LICHFL) on Tuesday announced a strategic partnership to provide home loans to over 4.5 crore customers of the postal bank through its network of 650 branches and around 136,000 post offices.
The postal bank also plans to leverage the network of 2 lakh postmen and Gramin Dak Sevaks. The announcement resulted in a spike in LIC Housing Finance scrips which at Rs 424.20 ended 4.81 per cent up from the previous close at the Bombay Stock Exchange.
LIC Housing Finance said it would handle credit underwriting, processing and disbursement of all loans, with the postal bank responsible for sourcing.
The alliance is part of the postal bank’s strategy to expand its range of products and services and to cater to the banking and financial needs of diverse customers, especially the unbanked and underserved, across the country.
At present, the postal bank sells insurance products in partnership with insurance companies.
LIC Housing Finance, promoted by the country’s largest life insurer, said that it offers interest starting from 6.66 per cent for loans up to Rs 60 lakh to salaried individuals. Most banks and NBFCs are offering home loans at interest rates starting from around 6.6-7 per cent.
Besides its traditional home loan product, the housing finance company is offering Griha Varishtha — designed for retired or serving employees of PSU companies, government, defence and banks.
The age of the borrower at the time of taking the loan can be up to 65 years and the loan tenure is till the attainment of 80 years or maximum up to 30 years, whichever is earlier. LIC Housing also offers upto six EMI waivers during the tenure of the loan.
“The partnership with LICHFL is a significant tie-up in IPPB’s journey to become one of the largest platforms
for availing credit products
by our customers for meeting various needs, in line with our focus on providing comprehensive customer-centric, convenient and digital solutions to our customers,” said J. Venkatramu, MD and CEO, India Post Payments Bank.
“We see this strategic
partnership as a significant step that will help our long-term business growth and improve our market share. This is in line with the company’s objective to increase business contribution from tier 2 markets and beyond,” said Y. Viswanatha Gowd, MD and CEO, LIC Housing Finance.
The housing loan market in India had a portfolio outstanding of Rs 22.26 lakh crore till December 2020.
Public sector banks retained the largest market share in housing loans with a near 45 per cent share over the last 3 years according to a report of CRIF High Mark. Housing Finance Companies in comparison have an overall market share of nearly 37 per cent.