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LIC Housing seeks to fund property buys in Dubai

Rukmani Vishwanath
N.K. Kurup

Mumbai , March 19

LIC Housing Finance Ltd (LICHF) plans to finance acquisition of housing properties overseas. To begin with, the company is seeking RBI permission to provide foreign currency loans to NRIs to buy houses in Dubai.

According to company officials, the Dubai Government recently allowed foreigners to acquire residential properties in a particular area in Dubai.

Those who buy such properties can also get 10-year visas.

Through its business partner in Dubai, LICHF is trying to tap this market. The company also needs to obtain a commercial licence from the Dubai Government, a senior official said.

The Dubai unit of LICHF has done a business of Rs 55 crore so far this year, and this is expected to more than double the next year, said Mr D. Krishnan, CEO.

Back home, the company is trying to cut overheads by rationalising the administrative centres.

Of the 67 centres, only 18 will have administrative set-ups and the rest will be converted into marketing units.

"The idea is to relieve the workload at the front offices so that personnel there can focus their energies on marketing. We have decided to use the hub-and-spoke approach, whereby every major area or State will have one back office centre. The peripheral areas will direct all their respective back-office work to this centre," said Mr Krishnan.

For instance, the whole of Kerala will have one back-office set-up in Ernakulam and Andhra Pradesh will have one in Hyderabad.

LICHF is expected to clock 30-35 per cent growth in business during the current year.

The company sees more opportunity in semi-urban areas where the demand for housing is rising and the asset quality is far better.

Mr Krishnan said that the company's net NPA is expected to be down at 2.5 per cent by the end of the fiscal, from 2.8 per cent earlier.

"We have put in place a dedicated recovery team which is expected bring in Rs 15-20 crore in March alone. This will release a lot of provisions and aid profitability in some measure," he added.

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