-
ALSO READ
NHB directs bigger housing finance firms to appoint chief risk officer
NHB notification asks housing finance companies to increase liquid assets
NHB guidelines to hit return on equity of some housing finance companies
Indiabulls loses Rs 6,000 crore following charges of money laundering
Budget 2019: NHB to retain power to inspect, penalise housing finance firms
-
The National Housing Bank (NHB), a housing sector refinancing body, plans to raise up to Rs 4,000 crore through non-convertible debentures (NCDs).
The NHB has robust asset quality and healthy capitalisation. But, these strengths are partially offset by an average earnings profile, given the institution's developmental role in the housing finance sector, CRISIL said in a statement.
The rating agency has assigned a ‘AAA/Stable’ rating to the non-convertible debentures of the NHB. It has also reaffirmed its ratings on the existing debt instruments and bank facilities at ‘AAA/FAAA/Stable/CRISIL A1+’.

The ratings continue to reflect the support the NHB receives from the central government on account of the bank’s key policy role in the housing finance sector.
The Reserve Bank of India (RBI) sold its entire stake in the NHB to the government for Rs 1,450 crore. With this divestment, the government now holds 100 per cent stake in the NHB with effect from March 2019.
In July 2019, government gave the RBI the power to regulate housing finance companies (HFCs). The NHB, a financial institution, will continue to carry out supervisory and refinancing activities, and will also play a key policy role in the housing industry.
The NHB extends refinance support to HFCs, scheduled banks, regional rural banks, state apex cooperative housing finance societies, and state cooperative agriculture and rural development banks. Additionally, it manages the rural housing fund and the urban housing fund.
Its outstanding loans under refinance support were Rs 69,805 crore as of June 30, 2019.
It has robust asset protection mechanism and the asset quality remains robust, with gross non-performing assets (NPAs) remaining low at 0.01 per cent as of June 30, 2019 (0.01 per cent as on June 30, 2018).
The provisions towards gross NPAs were 100 per cent. The institution has obtained mandates from scheduled banks, regional rural banks, and urban cooperative banks to directly debit their current accounts with the RBI if there is a delay or default in payment of refinance instalments. Moreover, funds are primarily extended to HFCs with strong credit worthiness.
NHB’s capital base is healthy, with a sizable net-worth of Rs 6,651 crore and above-average Tier-I capital to risk assets ratio (CRAR) of 14.8 per cent as of June 30, 2019. The overall CRAR was 16 per cent as of June 30, 2019 (18.7 per cent as of June 30, 2018).
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor






RECOMMENDED FOR YOU