HDFC Bank launches housing fund

Targeting elderly population:

Sanjeevi JAYASURIYA

The HDFC Bank launched the HDFC Housing Fund to facilitate an alternative long term investment plan specifically targeting the elderly population of the country.

Sri Lanka does not have an effective social security network for majority of the elderly population of the country and this vacuum has created the need for a secured fund to provide means for the latter part of the life. HDFC having aligned business strategies with social and economic development of the country introduced the housing fund to support the welfare of the elderly population, HDFC Chairman Siromi Wickramasinghe said.

It is time that we thought of ourselves. As the prevailing environment does not allow our children to look after the needs of the parents on a regular basis having a fund is a important aspect of a supporting system. Hence, contributing to the housing fund will have far reaching benefits", she said.

The fund is designed to provide higher interest than the current market rates. It is a unique retirement fund and the latest financial product to be launched focusing on obtaining the highest customer return in creating wealth. This is the first time that the local banking industry introduced such a product with the ability of being a customized financial instrument in catering to the varied needs of identified social clusters. The fund is designed to address specific community based needs including agriculture farming, fisheries, private bus operators, three wheeler taxi operators and the Pettah trading community.

The bank intends promoting the HDFC Group Housing Fund Scheme with minor adaptations to suit the needs of different institutions with specified corporate solutions and the specific needs of identified village communities.

There will be no committed fund to invest and the capital sum could be invested during the agreed period.

The investments are geared to pay returns that are equal to 75 percent of the lowest interest charge for housing loans. This mechanism would always yield above the market interest and the fund will offer housing loans to investors after 10 to 15 year period of accumulation of fund.

The HDFC Housing Fund has a high growth potential as it is incorporated with expected future changes in the social demographics. This fund will be able to attract 35 percent of self employed who are not members of any defined retirement benefit plan, thus providing an ideal retirement plan option, Wickramasinghe said.