The National Housing Bank (NHB) is planning to raise Rs 14,000 crore during 2013-14 for its operations, including a Rs 6,000 crore for the Golden Jubilee Rural Housing Finance Scheme, from the market. It is also expecting a long-term borrowing of $100 million from the World Bank in this fiscal that could be a part of this Rs 14,000 crore.
Speaking to reporters on the sidelines of a meeting of nodal officer of NHB Residex (an index of residential property prices) to commemorate its silver jubilee, RV Verma, chairman and managing director, NHB, “We are planning to raise Rs 14,000 crore during the fiscal. This would include the Rs 6,000 crore allocation for the Golden Jubilee Rural Housing Finance Scheme. We will raise the funds from the market.” The bank, which is a refinancier to banks and housing finance companies to promote lending to low-income households, maintains its account for the year from July to June, next year.
The borrowing from the World Bank is for a long-term of 25 years and would be used for disbursement to low- income households, he added.
The company expects its disbursement for the 2013-14 period to be at Rs 20,000-22,000 crore. In nine months ending March 31, 2012, the bank had disbursement of Rs 17,000 crore and expects to complete its accounting year in June at Rs 18,000 crore disbursement.
Outstanding loans for the year stood at around Rs 32,000 crore while advances had crossed Rs 1 lakh crore, he added. Almost 92 per cent of the advances was to the banks and housing finance companies.
MoU with 8 lending institutions
NHB’s Credit Risk Guarantee Fund Trust for Low Income Housing has signed a memorandum of understanding with eight lending institutions, including Indian Overseas Bank (IOB), Sundaram BNP Paribas Home Finance Ltd, Repco Home Finance Ltd, Aptus Value Housing India Ltd, Natrust Housing Finance Ltd, Pandian Cooperative Bank and State Bank of Hyderabad.
With this, around 30 institutions have subscribed to the scheme, which would make them eligible for availing credit guarantee cover under the scheme. Under this, the Trust Fund would provide credit risk guarantee to the lending institutions against their housing loans up to Rs 5 lakh for new borrowers in low income and economically weaker sections of population in urban areas without any collateral security or third party guarantee. The corpus fund allocated to the trust is Rs 1,200 crore.
It has also added six more cities to its NHB Residex, including Chandigarh Mohali, Meerut, Dehra Dun, Nagpur, Coimbatore and Raipur. The Residex helps general consumers, property buyers and borrowers in their decision-making by enabling comparisons over time and across cities and localities, and the emerging trends.
Mortage corp expects nod soon
India Mortgage Guarantee Corporation (IMGC), a joint venture firm in which the NHB, Genworth Financial, International Finance Corporation (IFC) and Asian Development Bank (ADB) are partners, expects the central bank’s nod to launch its commercial operations shortly. The company is expected to take at least four to five years to reach a good position in its operations, said a top official of NHB.
“We expect the Certificate of Registration (COR) from the Reserve Bank of India (RBI) to start operations of the mortgage guarantee company shortly,” said R V Verma, chairman and managing director of National Housing Bank, who was also selected as chairman of the IMGC last year. “This would be a company run on commercial principles in the market under the supervision and regulatory purview of the RBI,” he added.
The company is expected to provide credit guarantee to housing finance companies and banks for the money they lend to the customers. The company would help lenders get capital relief thus creating more liquidity which would result in improving credit availability and lower the interest rates, he added.
IMGC has an initial capital of Rs 120 crore and an authorised capital of Rs 750 crore which would be used for incremental business over a period of time. NHB has a 38 per cent stake in the company while Genworth Financial has 36 per cent and IFC and ADB has 13 per cent stake each in IMGC.