RBI's Rs 4,000cr refinance support to HFCs

The National Housing Bank today said it will provide the special refinance fund, which has been received from the Reserve Bank of India (RBI) to boost housing demand, at 8 per cent interest rate to housing finance companies.

"The RBI refinance fund will be given to HFCs at 8 per cent. This refinance is meant for housing loans of up to Rs 20 lakh," NHB Chairman and Managing Director S Sridhar said here today on the sidelines of the inauguration of a counselling centre in Kolkata on the reverse mortgage scheme.

The current normal refinance rate of NHB is between 9 and 9.5 per cent.

The demand for the RBI's refinance lifeline by HFCs has already surpassed Rs 4,000 crore offered in days, he said.

The disbursement to HFCs would be done in the next two to three weeks as per a formula as demand has exceeded, the housing development bank said.

Of the total housing loan portfolio of HFCs, about 63 per cent consists of loans up to Rs 5 lakh.

Sridhar, speaking about the fund raising plan said, NHB would raise another Rs 3,000 crore by June through the debt route.The bank has already raised Rs 7,800 crore so far during the year.

Meanwhile, NHB is in talks with leading insurance companies, including Life Insurance Corporation of India, to restructure the reverse mortgage scheme for senior citizens.

This would enable a borrower to avail annuity till death against current norm of a maximum 20 years.