LIC Housing Finance, the housing finance division of Life Insurance Corporation (LIC) of India is planning to venture into the banking sector, if it meets the eligibility criteria established by RBI, which would be announced in July.
The home loan provider would be venturing into the sector, even if its parent LIC is not able to participate.
R R Nair, director and CEO of LIC Housing Finance said, “We are interested in applying for a banking licence. LIC may or may not be part of the venture because it is a public sector organisation and has its own regulations to follow. We have not initiated any talks with RBI. We are waiting for the guidelines from the central bank”.
The HFC would commence the functioning of its real estate venture capital fund in the next 6 months. The seed capital for it would be Rs. 500 crore. Nair said, “About 20 per cent of the capital will be from LIC and the housing finance company and the remaining would be mobilised from HNIs (high net worth individuals) and institutions”.
Previously the company had intentions of entering a joint venture for this but has ultimately opted to go alone.
The company also plans to raise capital amounting to Rs. 20,000 crore this fiscal through non-convertible debentures and public deposits.
The company’s share of home loans has gone up to 12% in 2009-10 as against 6% in 2008-09.