Interview with Vinay Sah, CEO and Managing Director – LIC Housing Finance Limited
Realty Sector on Revival Path
A post graduate in Statistics from Lucknow University joined LIC in 1983, only because it was the first job offer that came by his way. After more than 33 years with the company Vinay Sah, CEO and Managing Director – LIC Housing Finance Limited (HFL) is steering the organization to newer heights. In conversation with Sapna Srivastava, he recounts his journey and briefs on the current realty scenario.
A veteran of the industry Vinay Sah has experienced life in an upscale metro to the most rural regions of India. No wonder, meetings with him have always been an informative affair. For instance, he mentions a heart-warming incident that became the reason of his long association with LIC. “It was around 1984 that I was on tour to Jagdalpur and was asked to present the insurance cheque to a widow during a death claim presentation in the remote village. While handing over the cheque of little more than Rupees Ten Thousand, in the few seconds of eye contact the gratitude that I saw made me realize that this job was more than just work, it offered me an opportunity to make a difference in the lives of many,” he told.
Vinay Sah when initially joined LIC he worked at divisional office and was in charge of new businesses and the planning department which existed only for five years in the organization from year 1982. “In 1980, LIC undertook massive decentralization initiative. Till then, all processes were done at divisional office manually. For example loan papers from branch office would travel physically to the divisional office and then back, would take a long time. In 1985, I worked as a programmer and then in HR department for a while. From about year 1988-89 to 2008, I was in marketing and one of the few to be in charge in all marketing positions, becoming executive director marketing in 2015 with product development as part of my portfolio,” he reminisced.
Talking about the real-estate scenario today he felt that the infrastructure status to affordable housing which was long on the wish list of the industry will give a major boost to the residential real-estate. Vinay said, “Developers would be encouraged as it will ensure easier access to institutional credit and help in reducing borrowing cost for affordable housing projects. With infrastructure status accorded, approval process for affordable housing projects would improve through the envisaged single window clearance. This would further simplify process, lay clear guidelines and increase transparency. Also, with RERA, accountability on the part of developers will increase, thereby attracting debt and pension funds to invest in affordable housing segment. For LIC HFL too, affordable housing is the focus area for the current year. Our project finance teams situated at various locations have started identifying affordable housing projects for funding. We price the loans at a lesser rate as compared to the other project funding schemes. There will be a perfect synergy between bulk lending to developers and through their projects expand the retail customer base.”
According to Vinay other positives for the realty sector have been the measures like tweaking of the definition of affordable housing projects from the earlier built up area to carpet area that will increase the size of affordable homes, allowing 100% deduction of profits from tax and extension of time frame for project completion from 3 to 5 years. “As we all know, affordable housing is fairly under penetrated market in our country despite pent up demand. The inclusion of Middle Income Group (MIG I and MIG II) along with the LIG/EWS category under the PMAY CLSS will further provide the impetus needed for developing affordable housing projects in the country. More organized developers will be attracted towards this segment catalysing development and increasing the supply of affordable housing stock in the country.”
LIC HFL has been done well in project financing across Southern, Western and Eastern markets during the last year. We have been able to grow the project loan portfolio by 49% as of June’ 17 quarter.