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Bank of Baroda (BoB) ties up with Edelweiss Housing Finance for offering home loans

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Bank of Baroda (BoB) ties up with Edelweiss Housing Finance for offering home loans

Bank of Baroda (BoB) is one of the country’s foremost public sector banking entities and has recently entered into a highly strategic collaboration with Edelweiss Housing Finance Limited or EHFL for co-lending pertaining to home loans. These home loans will be offered to both salaried and self-employed customers at the bank.

Home loans are a major focus area once again for most Indian banks with lower rates of interest driven by the RBI’s sustained reduction in repo rates and an emphasis by the Government on affordable and mid-income housing across major cities.

Key details of the tie-up

EHFL is a subsidiary entity of Edelweiss Financial Services Limited and has ventured into this strategic tie-up with BoB (Bank of Baroda) for co-lending to salaried and self-employed borrowers as far as home loans are concerned. An official statement has already been released by the bank in this regard. Under this agreement, Bank of Baroda and EHFL will equally share the risks involved in the loans along with their rewards as well.

Both entities are striving to build a more favorable home loan ecosystem for borrowers in the country with an alternative disbursal model that is mostly asset-light. It will also build a more solid revenue model for both entities as per experts. Co-lending offers the advantages of dealing with one entity only for home loans as far as customers are concerned. There will be better access towards a more affordable blended interest rate which could spur higher interest in the co-lending format for home loans.

The Executive Director at Bank of Baroda, Vikramaditya Singh Khichi, has already opined that the aim here is to scale up overall reach of the bank to widen its access to prospective home loan borrowers. The Chief Executive Officer at EHFL, Rajat Avasthi, has stated that easier home loan availability will drive higher real estate demand over a sustained time period, thereby creating more employment opportunities and also sustaining more small-scale industries in the country.
Other developments at Bank of Baroda

Bank of Baroda (BoB) has inked a memorandum of understanding (MoU) with the Government in Gujarat for enabling better credit flow to MSMEs for green-field projects and start-ups along with women entrepreneurs and those entrepreneurs from backward locations. This will be done under the Gujarat Single Window Clearance Act of 2017 and Ordinance Number 1 of 2019. Customers can register requests on the Gujarat Government’s single-window platform for getting credit. The generated leads will be dispatched to BoB for taking the process forward. The bank has a processing cell in Gujarat and Mumbai for tackling these leads on priority and will make sure that in-principle decisions/approvals are notified within a month.

BoB (Bank of Baroda) has also invited fresh bids for selling off the head office of the former Dena Bank located at BKC (Bandra Kurla Complex) in Mumbai. The previous negotiations for selling this property were done with ICICI Bank and LIC (Life Insurance Corporation of India) although the deal did not materialize as per reports. This is the second time that BoB has asked for fresh EoI (expressions of interest) for selling off this prime BKC property. 6th January, 2020, is the last date for submission of fresh bids while after the smooth merger with Vijaya Bank and Dena Bank in April 2019, BoB has been considering selling off this property under its new divestment programme.

 

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