ICICI not to launch reverse mortgage products
Kolkata, Jul 4: When most of the public sector banks are planning to introduce reverse mortgage product, ICICI Bank, a leading private sector bank, has ruled out its possibility.
Finance Minister P Chidambaram has mooted the concept of reverse mortgage for the elderly.
The National Housing Bank(NHB) would introduce a reverse mortgage loan product for senior citizens. The eligibility of the product would be 62 years. Under the scheme a senior citizen, who is the owner of a house, would be able to avail a monthly stream of income against the mortgage of his/her house. many public sector banks ,including Allahabad Bank, is also in the process of launching Reverse Mortgage Loans(RML).
Speaking to mediapersons here today at the Banking Conclave organised by FICCI, ICICI Deputy Managing Director Dr Nachiket Mor said,''Indian market is still premature for this kind of product.
Before launching such a product in the market, a lot of groundwork is needed. In India, data related to real estate prices, registration and many other factors are not available.'' He said, ''Our business model focuses on cash-flow based funding, not collateral based funding.'' Reverse Mortgage being a collateral product, hence he indicated that introducing such a loan was not in their priority list.
The real estate prices fluctuate and selling off property is a process which is full of hassels, he said.
He also emphasised that the there is need for building credit infrastructure in the country in order to get access to credit related data.
Meanwhile, speaking on the bank's plan to expand reach in the rural market, Dr Mor said the bank has introduced biometric cards for rural population.
''We will be issuing 1000 cards everyday and we want to offer this card to three million population. This card, called E-PURSE, is currently targetted towards rural population and urban poor,'' Dr Mor said.
The bank has already issued 1.40 lakh biometric cards in the last two years.
The company is also planning to set up full-service branches in merging markets like Russia and Srilanka.
UNI