ICICI Bank is back to doing what it is best at-firing the retail loan engine as lower property prices and a softer interest rate are unleashing a pent-up demand in cities outside the metros.

The bank's mortgage book has crossed Rs 2 trillion even as it has reported its highest ever mortgage disbursement in October. The loan book grew by over Rs 28,000 crore from the end of September when the home loan outstanding was Rs 2,11,734 crore, which also included 19% loan against property (LAP).

ICICI Bank is the largest home loan financier among the private banks. HDFC Bank, the largest private-sector lender, does not contract home loans; it merely markets and originates for its parent HDFC Ltd. Axis Bank, the third-largest private-sector bank, reported a home loan book of just Rs 1,10,052 crore at the end of the second quarter. The State Bank of India (SBI), which is state-owned, is the largest home loan financier in the country with a loan book of Rs 4.68 lakh crore.

ICICI Bank executive director Anup Bagchi said the growth was aided by the bank's expansion in Tier II, III and IV cities. "With the growth parameters in the economy stabilising, we believe that the growth in home loans will be sustainable. We took four years to grow from Rs 1 trillion to Rs 2 trillion. We feel we will touch the next trillion milestone in less time than this."

Bagchi added that most of the loan growth is organic with refinance opportunity being only a small portion of its growth.

The bank's corporate loans had de-grown by Rs 1,396 crore to Rs 1,57,357 crore over the preceding quarter. But the investments on the corporate bonds are rising. Retail loans now form 63% of the bank's total funded advances with the thrust of the bank clearly on its retail lending. But the bank said that it is focussing on all opportunities. In the second quarter the bank had some prepayments and from the new business point of view its disbursements on the corporate side were also pretty high.

ICICI Bank head secured assets Ravi Narayanan said, "The disbursements in October were even higher than September. October witnessed highest ever mortgage disbursement."

The bank said nearly one-third of the new home loans is through its digital channels and it is scrutinising the new customers through Big Data analytics. The bank plans to increase its digital sourcing of home loans to three-fourth in the next three years.

"Anticipating rapid growth in demand in upcoming cities for real estate, especially in the affordable segment, we have expanded our footprint far and wide. Now, we are present in 1,100 locations, including Tier II, III and IV cities, as well as fast-growing outskirts of metro cities. We have also scaled up our credit processing centres from around 170 to over 200 in past two years in these new markets for efficient processing and quick turnaround for customers," Bagchi said.