HDFC Bank unsecured loans exceed Rs 1 lakh crore

MUMBAI: HDFC bank The unsecured loan portfolio has exceeded Rs 1 lakh crore which accounts for almost 14% of the bank’s loan portfolio. Considering that the bank’s foray into this segment started its momentum around 2015 digital loansexpansion makes it the fastest growing segment.
“We have now reached a turning point with monthly disbursements in excess of Rs 8,000 crore,” said Arvind Kapil, Group Leader (unsecured loans, home and mortgage loans). “HDFC Bank has pushed the competitive frontiers of this business by expanding the loan portfolio through faster processing times, even with arrears in this segment limited to approximately 0.48%,” Kapil said. By the way, the bank’s unsecured loan defaults are lower than distressed assets the industry has even witnessed how in secured loans home loan.
The unsecured loans include both personal loans to employees and loans to small business owners. While the average personal loan ticket size is around Rs 3.5 lakh, it is double that for business loans. Kapil said the key differentiator is turnaround time. Although the arrears were small, the bank has better margins on these advances, considering the interest rate ranges from 11% to 13.5% for employed borrowers and up to 15% for business loans.
In 2015, HDFC Bank introduced the 10-Second program, which used software to pay out loans to customers based on ratings. The analytics engine calculates eligibility by pulling down the customer’s creditworthiness and existing liabilities, and noting the frequency of cash flows into the bank account. The bank is working on developing capacity to disburse loans to non-customers.

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