Nhb Eases Refin Limit For Housing Loans
The National Housing Bank (NHB) has relaxed the refinance ceiling, as a percentage to outstanding housing loans, with regard to scheduled commercial banks, with effect from June 1, 1997. The bank has also revised upwards, the scope of housing loans eligible for refinance because of the spurt in costs of various inputs needed in constructions.
In a circular to all scheduled commercial banks, K K Mudgil, executive director of NHB, announced that, because of the increase in cost of various inputs for construction of houses, the scope of housing loans eligible for refinance is being revised from Rs 5 lakh to Rs 10 lakh. Accordingly the loan slabs and interest rates will also be revised.
Now NHB, when lending out to banks for acquisition or construction of new units, will charge 10 per cent interest for loans upto Rs 50,000. Interest charged will be 14.25 per cent for loans from Rs 50,001 to Rs 2 lakh, 15 per cent for loans from Rs 2,00,001 to Rs 5 lakh and 15.50 per cent for loans from Rs 5,00,001 to Rs 10 lakh.
Banks can charge a maximum 12 per cent interest on loans upto Rs 50,000 when lending out to the ultimate beneficiary.
This is exclusive of interest tax. For loans from banks to the ultimate beneficiary, the former are free to decide on the interest rate to be charged.
For loans given for upgradation or major repairs, NHB will charge banks 14.5 per cent interest for loans upto Rs 60,000.
The banks are free to decide on interest charged to ultimate beneficiary.
In another circular to all scheduled commercial banks, Mudgil has announced that the refinance policy has been revised. According to the earlier instruction, the refinance amount shall not exceed 50 per cent of the outstanding loans of a scheduled commercial bank at any point of time. This has now been changed.
For public sector banks, refinance from NHB shall now not exceed 100 per cent of its outstanding housing loans, including loans not refinanced by NHB. For other commercial banks, refinance from NHB shall not exceed 60 per cent of its outstanding housing loans, including loans not refinanced by NHB.
NHB, when lending to banks for acquisition or construction of new units, will charge 10 per cent interest for loans upto Rs 50,000, 14.25 per cent for loans from Rs 50,001 to Rs 2 lakh, 15 per cent for loans from Rs 2,00,001 to Rs 5 lakh and 15.50 per cent for loans from Rs 5,00,001 to Rs 10 lakh.