The housing finance market is forecasted to grow at a Compounded Annual Growth Rate of over 30% this year, says V A Varghese, Vice-President _ Retail Banking, Global Trust Bank.

Indian consumers traditionally had a credit averse attitude and only in the 1990s did this mindset change. From the banks' perspective this was an opportunity to diversify their risk as all lending under this segment is templated and the processes followed are standardized. Apart from this, the Retail Asset Portfolio would be distributed over a large number of borrowers as compared to wholesale lending. Retail assets also provide the bank an opportunity to cross-sell liability products to the asset customers and build long-term profitable relationships.

Moreover, since 2001-02 the credit offtake has been very low and the retail-lending prospect interested banks, as the other deployment options were limited. In the recent past, the dependence of the triple-A rated corporates on the Indian banking system to raise funds has come down, as now they are able to raise funds at lower costs through alternative sources like Foreign Direct Investments (FDIs) and ECB. As the retail lending opportunities have opened up and showed tremendous potential, more and more banks are fighting for a share of this lucrative pie.

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