Twigs For Every Nest

The liberalisation of the '90s saw the traditional role of banking being overshadowed by new opportunities in the capital market, inflow of foreign investment and privatisation. Government help came through tax incentives for home ownership and dropping interest rates that were once between 16-18 per cent and now stand at 7.5-8.5 per cent.

The flourishing economy led to high household incomes and for the new credit card generation, unafraid of debt, it was possible to own their own homes. The retail-lending scenario underwent a change, with banks and other institutions taking the plunge into housing finance. Here, it became important not to get swept with the flow and keep the focus on long-term benefits.

I credit our success over the years to the unwavering importance we placed on our customers. Whether it meant regular interaction with property developers to gauge quality of projects or designing products, customer service was never compromised. We adopted the principle-centred leadership concept at HDFC.

In this new century, HDFC has grown into a financial conglomerate covering a wide gamut of services that includes banking, insurance (both life and general), an asset management company, a BPO and a credit bureau to provide value-added services for customers. The housing sector, too, has been growing faster than ever. While we have assisted over 2.5 million families to own a home through loans worth over Rs 80,500 crore, the reality is that with a housing shortage of 19.4 millions units in India, we still have a long way to go.

The recent decision to allow 100 per cent FDI under the automatic route in townships, housing, built-up infrastructure, construction and development projects will boost construction, catalyse investment, usher in new technology and improve quality of buildings. But the path to implementation will be critical.

A resultant effect will be the added pressure on the infrastructure of our cities, which are already fighting to survive. Institutional reforms are urgently required to develop our cities and improve their planning, governance and utility services. There is a need for regeneration, but it needs to be done with the participation of all stakeholders, if the initiatives are to be successful.

We also need to have an efficient urban land market, starting with clear title documents, which would ensure the flow of financial services to the owner. A delay in corrective action today will restrict housing supply tomorrow, taking us further away from our primary goal of affordable housing.

Rental housing can be a strong driver for better housing services for households seeking temporary relocation. In the current low interest rate scenario, surplus accommodation can successfully be deployed in rental accommodation.

In the midst of these changes, I believe that proactiveness is vital for development. One issue close to my heart has been to create greater transparency and accountability in the housing sector. We need to work against the red tape and bureaucratic loopholes. HDFC is ready to take the first steps to initiate change. We are eager to support developers willing to tackle issues like pricing houses on the carpet area basis, as this will benefit consumers. We need to look at the concept of providing guarantees for homes like other products, since housing is, by far, the largest personal investment. The quality factor and maintenance are as important as in other consumer durables.

Change will always find resistance, but I believe it is initiatives like these that will help decrease ambiguity and contribute to growth in this sector. High-tech homes that are energy-efficient and environment-friendly are already being developed, where robots and computers will don the mantle of housekeepers. Combine such technology with instant home loans, top-class services, good infrastructure and you have a winning combination. All it takes is a vision and, of course, the will to make it succeed.