Banking can be described as the business of running an establishment where money isdeposited in accounts, withdrawn and borrowed also by the customers. Banks performtheir function of attracting deposits and providing credit. However banks today functionfor customer satisfaction rather than being just a mere intermediary. The housing financeindustry in India is estimated to be approximately US $ 5 billion (INR 250 billion. US $1 = INR 48.5). The market grew at 35 to 40 percent per annum for the last five years, andindustry sources predict this growth to continue for another decade.Specialized housing finance companies, commercial (local as well as foreign) banks, andcooperative banks and other non-banking financial companies (NBFCs) are the main players in this competitive market. Housing finance companies are losing their traditionaldominance to commercial banks.Several factors are responsible for the growth of this sector. These include:Continuously rising demand
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Affordability of real estate
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Rising levels of disposable income
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Increasing competition
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Lowering interests
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Government policiesFurther push will be provided when the securitization market in India matures, especiallyin the mortgage backed securities (MBS) area.The Indian housing finance companies and Indian commercial banks control 90 percentof the market. There are as yet no foreign housing finance companies. Of the 45-oddforeign banks that operate in India, only three foreign-owned banks do housing finance business of some significance. While there has been consistent growth, the size of mortgages continues to be extremely small by international standards. N.R.INSTITUTE OF BUSINESS MANAGEMENT2
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