Tighter regulations will make NBFCs robust, support growth: Sanjiv Bajaj
IPO-bound Bajaj Housing Finance aims to expand by diversifying its book and exploring multiple sources of funds, Chairman Sanjiv Bajaj tells ET. Bajaj Finance is not exploring a bank licence, however, he says. Edited excerpts from the interview:
What are the challenges you foresee for the housing finance industry considering that banks are also getting in the space aggressively?
I think that the opportunities outweigh the challenges, this is when you are growing at 7% and the government is also putting support for the larger economy to grow even faster in the coming years, in addition to the fact that the government is also supporting housing, with housing for all, so the opportunity is very large. The challenges will remain in the locations that you want to grow, the kind of customer segments you enter, if you are building a diversified or a monoline book and sources of borrowing. Therefore, the path that we have taken is to build all this in a diversified manner ( such as home loans, loans against property, developers’ loans), we are not just in one line of lending or borrowing, we have multiple lines for this and have diversified it. This makes up most of the challenges, and we can build up the business in the foreseeable future.
Considering banks have lower cost funds, how do you plan to overcome that challenge?
Banks have an advantage because of CASA, but CASA comes with the requirement of CRR and SLR. So it ends up balancing itself. Banks have stable sources of retail money and large deposits and it's also
