YES Bank announced it is entering the home loan business with a clear focus on the affordable housing segment. The bank’s decision comes in the wake of RBI’s decision to allow banks to raise long-term resources to finance affordable housing. The money raised via bonds will not attract the cash reserve ratio and statutory liquidity ratio norms. As a result, this will reduce the cost of funds for banks. Pralay Mondal, senior group president (Retail and Business Banking) of the bank said home loan will be a strategic product for the bank and it has reached the branches and the bank is in the process of rolling it out. The average size for mortgage loans will be about Rs 35 lakh, he added. Till now, the bank had been offering loans in collaboration with Dewan Housing Finance and Indiabulls Housing Finance. According to RBI norms, loans of up to Rs 50 lakh for a property valued up to Rs 65 lakh in six cities – Mumbai, New Delhi, Chennai, Kolkata, Bangalore and Hyderabad – and up to Rs 40 lakh in other centres, will qualify for affordable housing.
