LIC Housing Finance director and chief executive officer S.K. Mitter in Calcutta on Friday. Picture by Kishor Roy Chowdhury

Calcutta, Oct. 7: LIC Housing Finance Ltd has set a disbursement target of Rs 5,700 crore for the current fiscal compared with last year’s actual disbursals of Rs 4,650 crore. Its sanction target is Rs 6,270 crore for 2005-06 against last year’s actual sanctions of Rs 5,209 crore. The company’s total portfolio is Rs 13,000 crore.

For the half-year ended September 30, LIC Housing Finance has sanctioned loans of Rs 2,335 crore and disbursed Rs 2,108 crore. It enjoys an 8 per cent market share in the home-loan business.

“We expect the business to pick up in February-March. As a result, we shall be able to meet our targets,” said S.K. Mitter, director and chief executive of LICHFL.

Mitter said one of the key focus areas is to bring down the non-performing asset (NPA) levels, which stands at 4.8 per cent. In comparison, the industry average is 2 per cent, while the benchmark figure is 1 per cent.

“We have taken critical steps to reduce the NPA levels, including strengthening the appraisal system, setting up special recovery teams and appointing professional recovery agents,” Mitter said.

With these measures, LICHFL expects to reduce the NPA level to 3.4 per cent by the end of this fiscal. The total NPA corpus of the company is Rs 530 crore.

“With the increase in risk weightage for housing finance companies to 75 per cent as directed by the National Housing Board, we will have to urgently increase our capital,” Mitter said.

However, the company is yet to work out the amount and the means to raise the capital, he added.

LICHFL has floated a 100 per cent subsidiary, LICHFL (Care Homes) Ltd, to run assisted community living centres for senior citizens. The first such centre is coming up at Bangalore. “We plan to set up such centres in Calcutta. We have approached the government for a 10-acre plot. Though no plot has been identified, they have assured us of the allotment,” Mitter said.

LICHFL (Care Homes) has also approached the Orissa government for lands between Puri and Konark and also in Bhubaneshwar, he added. “Apart from these, we have also identified a location in Cochin and also looking for a suitable position in Goa.”