National Hsg Bank Bonds Oversubscribed

The National Housing Banks (NHB) privately placed bonds saw an oversubscription amounting to Rs 250 crore against the initial offered amount of Rs 200 crore. A major part of the subscription was from private sector banks who failed to meet priority sector lending targets, according to sources.

The executive director NHB, K K Mudgil, said that the priority sector bonds are expected get further subscription from both nationalised as well as private sector banks. The bonds have a greenshoe option of Rs 300 crore in addition to the initial amount of Rs 200 crore.

There are two types of schemes being offered with half-yearly interest rates of 13 per cent for five years and 13.5 per cent for seven years.

According to Mudgil, the proceeds of the bonds will be used for providing housing loans up to Rs 2 lakh.

The privately placed bond issue which opened on February 12 is due for closure on March 27, by which time the housing bank hopes to gather the greenshoe option amount also. Interest in this bond issue is on account of the investments being eligible for inclusion under priority sector advances.

Further the investments also qualify for banks statutory requirement of 1.5 per cent of incremental deposits being allocated for housing finance companies.