Interest rates to be stable till next quarter
18^th Dec 2009

 

Does customer consider BRAND before zeroing on the lender?

As this is not a consumer durable but a financial transaction, more than branding a customer looks for the track record of the company, consistency of the policy and the transparency norms followed.

See when the rates go down, how many organizations follow that speed in which they move it upwards? There are organizations which have revised the rates twice in a month (upwards), but when rates went down, has anybody meticulously followed the same trajectory? When rates went down, we reduced 200 basis points. This is the track record and the type of transparency our organization follows.

I would give 90% marks to our business growth on this count. Customers not only take the track record into account but also how we are treating the existing customer. Then service is another aspect of the business. So for doorstep service customer does not mind paying 25 basis point more.

Brand constitutes all the above, it is a function of all these things.

Still all said and done, property prices play a major role as this permanently benefits the customers. Interest rates going up and down, is not a sustainable factor at all. Its people’s perception that interest rate is driving the market. Interest rate is only fraction of your total investment.

 

What will happen to interest rates?

Interest rates will be stable for next three months.

 

What kind of increase one can expect after that?

It may move upwards around 50 basis points but they are going to remain stable.

 

As far as LICHF is concerned what are the challenges?

Challenges are there when you have kind of ambitious plans and to meet up these plans, you need to have continuous challenges. We create such targets and plans that there is continuous challenge.

 

What are your marketing plans?

We are going by the quality and not compromising on the standards of the organization. We are rather very stringent. With this kind of growth in place, we have to be careful about the quality we are offering.

We are very clear that no growth should be there at the cost of quality. We place our recovery mechanism and marketing on the equal footing. We pass on the benefit to the customers.

Placement of new agents is taking place, replacements of unproductive agents is on. We have started distribution of financial products which will double our distribution capacity in couple of years and 30 offices have already started which will be increased to 200 offices across the country. This will be very good enhancement of the distribution system. This is the long-term plan.

 

How do you look at the competition?

It has always been HDFC. Though it is not competition but co-existence. For our qualitative improvement, we see HDFC as benchmark, to the extent of improving ourselves and not for the competition. Whatever operation area we take up, we want to be one of the best.

Mission of the company which was adopted way back, is to be the best housing finance company in India and we have taken significant steps towards that.

 

About LIC Housing Finance Limited »

LIC Housing Finance Ltd is one of the largest housing finance companies in India having one of the widest networks of 158 marketing offices across the country and representative offices at Dubai & Kuwait. It was promoted by Life Insurance Corporation in 1989 and a public issue was made in 1994. It launched its maiden GDR offering in 2004. The company enjoys ‘AAA’ rating from CRISIL indicating highest safety with regard to the ability to service interest and repay capital. The Fixed Deposits of the Company are rated FAAA/stable by CRISIL.