Consider capping rates on affordable loans: LICHF chief

LIC Housing Finance MD and CEO Tribhuwan Adhikari has called for capping interest rates on affordable housing loans, citing rates of 15-16% charged by some housing finance companies as unaffordable.

Adhikari suggested that the Reserve Bank of India or National Housing Bank could prescribe a ceiling on lending spreads over funding costs for affordable housing loans.

He opposed linking housing finance company rates to external benchmarks like the repo rate, because about half of the sector's borrowings come from banks, which would put HFCs at a disadvantage without similar low-cost funding access.

LIC Housing Finance is cautiously entering the affordable housing segment using a 'banking surrogate' product that assesses borrowers via bank statements and GST filings instead of income tax returns.

The company expects its loan book to reach around Rs 3.5 lakh crore by FY27, with Q1FY27 net profit up 10% to Rs 1,499 crore and loan growth at 14%.