HDFC Bank director Keki Mistry on Wednesday said demand for housing in India will continue and it has the power to unlock the economy’s potential.

Speaking at the foundation day celebrations of Bandhan Bank, Mistry said the housing sector also generates large scale employment and has a better credit risk profile as compared to other sectors.

“Housing is the key to unlock the potential of the economy. I am optimistic about the demand for housing in India. It also generates large scale employment,” said Mistry, erstwhile HDFC vice-chairman and CEO.

Mortgage lender HDFC has now merged with HDFC Bank.

Mistry said the penetration level of mortgage lending in the country is very low compared to the US or China.

“Mortgage to GDP ratio in India is very low,” he said.

“The structural demand for housing in the country will always be strong,” Mistry said. “Housing loans are secured and have a better credit risk profile,” he said.

On Corporate Governance (CG), Mistry said there is a need to strengthen the role of independent directors.

“CG is a measure of how companies are run. Strong CG principles are essential for long-term sustainability. This is why there is a need to strengthen the role of independent directors,” he added.

“Good CGs have a distinct advantage as investors are ready to pay a premium. More importantly, the role of independent directors is important as the business environment has become far more complex,” said Mistry.

He said that the independent directors act as a medium between various stakeholders and the management.

Apart from CG, Environment, Social and Governance (ESG) is also becoming important and has been recognized by the boards of companies.

Talking about the economy, he said that India is now in limelight as one of the fastest growing economies of the world.

He said, “In recent years, India’s growth has exceeded expectations. Foreign investors are now acknowledging the country’s growth potential. It is poised to become the world’s third largest consumer market after the US and China. “

He added that the Indian banking sector has become more resilient with the NPA levels coming down.

Mistry said, however, that the economy is largely dependent on oil prices as India imports 85 per cent of its requirements.

(Only the headline and image of this report may have been reworked by Business Standard staff; the rest of the content was auto-generated from a syndicated feed.)

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