NHB gets proposals of $1.32bn from HFCs for tapping ECB

National Housing Bank (NHB), the regulator for the housing finance companies, today said it has received a proposal from various mortgage firms including HDFC and LIC Housing Finance to raise about $1.32 billion under the external commercial borrowing (ECB) route.

"We have received proposals worth $1.32 billion under ECB route," NHB Chairman and Managing Director R V Verma said here.

Of this, HDFC has applied for raising funds upto $500 million, LIC Housing Finance $300 million, NHB $200 million, Indiabulls Housing $200 million, Dewan Housing Finance $70 million and Gruh Housing Finance $50 million.

As per the mandate, NHB has been authorised to do preliminary scrutiny of the proposal and then send to RBI for final approval, he said.

Applications for LIC Housing Finance and Dewan Housing Finance are in the process of scrutiny and will be sent to RBI for final approval soon, he said, adding, other proposals have been forwarded to RBI.

Earlier this year, RBI had allowed housing finance companies (HFCs) and NHB to raise funds under ECB route for financing low-cost, affordable housing units during the current fiscal.

Even for the next year (2014-15), the RBI has set a limit of $1 billion.

 "In the first quarter alone we have received applications exceeding $1 billion. At this going rate it would touch $2 billion," Verma said.

However, he said, the government and RBI has to take a call on increasing the limit of $1 billion. This window is available to real estate developers as well besides HFCs.

India companies are increasingly availing ECB route, raising funds at lower cost from the overseas markets.

At present, ECBs can be raised for investment such as import of capital goods, new projects, and modernisation or expansion of existing production units.