The Union Bank of India (UBI) has entered into a strategic partnership with the housing finance company Home First to offer mortgage loans to its clients at a competitive interest rate. Making the announcement in a press release on Friday, Home First said the partnership will help the company expand its existential geographic base while continuing to leverage its technology-driven customer approach. The partnership aims to allow the two entities to offer a seamless experience to retail mortgage clients.
The Home First and UBI merger is the result of the Reserve Bank of India’s co-lending framework which provides a collaborative model to benefit from a bank’s low-cost funding model and the profitable sourcing capabilities of the Bank of India. non-banking entity.
Under the reconciliation provision, Home First will generate loans in accordance with UBI’s agreed credit policy, in accordance with RBI’s co-loan arrangement. The housing finance company will keep a maximum of 20 percent of the loan on its ledger while the remaining 80 percent will be recorded in UBI’s ledger. Home First will act as the servicing agent for loan accounts obtained through the partnership during the loan life cycle.
UBI is one of the oldest and largest public sector banks with a total deposit base of over Rs 9.14 lakh crores and an advance ledger (AUM) of Rs 6.35 lakh crore as of September 2021 .
Speaking on the development, Home First Managing Director and CEO Manoj Vishwanathan said the partnership will allow the company to provide faster real estate financing to potential buyers with ease and transparency. He added that using UBI’s deposit-based franchise with HomeFirst’s technology-based distribution will allow them to deliver effective mortgage solutions to a broader customer base.
Home First is a technology-driven home finance company focused on first-time buyers from low- and middle-income groups. The company posted a more than 200 percent increase in profit for the second quarter of fiscal 22 compared to the second quarter number of the previous fiscal year. From Rs 14.33 crore in the second quarter of FY21, Home First’s net profit rose to Rs 44.87 crore in the second quarter of fiscal 22. The company’s total income jumped by 34.3% year-on-year and rose to Rs 146.16 crore in the quarter.
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