Deepak Parekh, Chairman of banking and financial services company HDFC, on Monday said that he is optimistic about the future of the real estate sector, especially the small homes. However, he believes the service sector is going to take long before it recovers.

“The pain, the struggle and difficulty has been in close contact service sectors like restaurants, hotels, transport, civil aviation and these industries still have a long way to recover,” said Parekh in an interview with CNBC-TV18.

Parekh said October 2020 was a record month for auto as companies saw all-time high numbers of sales.

On inflation, Parekh said, “The latest monetary policy has been mature and accurate although the inflation is higher than the comfort zone of the Reserve Bank of India. They have decided not to make any changes and leave the surplus liquidity into the system.”

Parekh is confident RBI will not destabilize any large non-banking finance company (NBFC) or housing finance company (HFC) even if they don’t want to convert into a bank.

Speaking about NBFCs, Parekh said that there needs to be a change in the RBI Act for corporates to enter the banking system.

“I do not see it happening in an immediate manner. It’s a 2-3 year process. However, in the end, RBI will be more conservative and cautious in their usual style and manner and will differ giving licences to corporate houses,” he said.

On the GDP front, Parekh said, “Q2 has surprised everyone; although we had a negative gross domestic product (GDP) growth rate for Q2, we should look at it as an aberration.”

“However, look at any number, whether it is e-bills, tolls and even housing sector, we never expected that September and October would be such fantastic new inflows of application compared to previous September-October, which was pre-pandemic,” said Parekh.

For entire interview, watch video

(Edited by : Niral Sharma)