Indiabulls, HDFC join hands to offer home loans at competitive rates

Indiabulls Housing Finance Ltd has tied up with finance major HDFC Ltd for a strategic co-lending partnership to offer housing loans to homebuyers at competitive rates. As per the agreement, Indiabulls Housing Finance will originate retail home loans as per the jointly-drawn up credit policy and retain 20% of the loan in its books, while the remaining 80% will be on HDFC Ltd's books. The company said it would service the loan account throughout the life cycle of the loan. In September 2018, the Reserve Bank of India (RBI) had first allowed banks to co-originate priority sector loans with non-banks, given Non-Banking Financial Companies (NBFCs) had at least 20% exposure in the joint loan. Under the co-origination model, borrowers get an all-inclusive interest rate as may be agreed upon by both lenders. As of 31 December, 65% of Indiabulls' asset book consisted of housing loans and its total loan book stood at Rs 70,282 crore, while HDFC Ltd had a loan book of Rs 5.52 lakh crore during the same period. Co-lending is a process in which two lenders come together where the smaller one originates the loan, performs credit appraisal and disburses a small amount of the total loan. After that, the larger lender steps in to lend a major share of the loan. Indiabulls Housing Finance Ltd is a mortgage lender headquartered in Gurugram. It is one of India's largest housing finance firms and is regulated by the National Housing Bank. Image SourceAlso read: HDFC Capital, Cerberus tie-up to help residential projects Also read: Why housing went through the roof during Covid: Care Ratings