@udaykotak Sir and @KotakBankLtd , this might be the perfect time to look at affordable housing. The spreads in this segment are far more attractive than in the prime home loan segment. A real opportunity to serve Bharat, profitably and sustainably.
Uday Kotak@udaykotak
Leading banks are taking 1 year wholesale deposits at ~8%. Translates to loaded marginal deposit cost of 9%+ after CRR (0 interest), SLR, deposit insurance, priority sector. Excluding opex. Low cost Retail Deposits (CASA non wholesale) show muted growth across the system. Yet, banks are issuing home loans at 8.5% floating rate. Borrow at 9% and lend at 8.5! -0.5% spread. And repo rates likely to drop. What about the opex/ credit costs? If the deposit tightness persists it is a challenge to the banking business model.
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