Interest rates on housing loans could soften by 0. 25% to 0.5% in the current financial year (2012-13), said Mr R.V. Verma, CMD, National Housing Bank (NHB). NHB is a wholly-owned subsidiary of RBI (Reserve Bank of India).
This thaw in housing loan rates will be due to the southward movement in key policy rates.
Mr R.V. Verma also said, “Upward pressure on interest rates is not there. HFCs (Housing finance companies) have already cut lending rates by 0.25%” .
Overall, NHB, which is the apex level institution for housing finance in the country, expects housing loans to grow by 20% in 2012-13, against 18% in 2011-12.
According to Mr. R.V. Verma, HFCs should be outside the purview of the 5% cap on bank loans to NBFCs (Non-banking finance companies). Else, it would go against the spirit of channelising affortable (low cost) housing finance from as many financial intermediaries as possible.
The NHB Chairman Mr. Verma referred to the fact that RBI has increased the limit for bank loans extended to non-governmental agencies, approved by NHB for their refinance, from Rs. 5 lakh to Rs. 10 lakh.
This is subject to the agencies on-lending only for construction or reconstruction of individual dwelling units (houses) or for slum clearance and rehabilitation of slum dwellers.
NHB expects to end the current financial year (July-June) with a disbursement of Rs. 15,000 crore (Rs. 13,000 crore last year) by way of refinance to banks & HFCs. NHB will disburse Rs. 17,500 crore as refinance in the July 2012 to June 2013 period..
NHB plans to securitise a small portion (Nearly Rs. 100 to 150 crore) of HFC loans. This is to demonstrate that loans can be successfully securitised under the new RBI guidelines.
Securitisation is the process of pooling loans & selling the consolidated loan as pass through certificates to various investors. This process will help HFCs become liquid & undertake fresh business.
The housing finance regulator NHB and supervisor of HFCs will also be securitising a portion of the disbursements it has made to HFCs and banks, said Mr Verma.
NHB is also reviewing refinance rates — the rate at which it lends funds to banks and HFCs.
Mortgage Guarantee company..!
A mortgage guarantee institution, promoted by NHB, has received the Foreign Investment Promotion Board’s (FIPB) approval to kick off operations, Mr. R.V Verma also said.
NHB is partnering with international institutions like the Asian Development Bank (ADB) and International Finance Corporation (IFC). NHB will have a 38% stake & will be the anchor investor. The company is being set up to compensate banks & HFCs in case of defaults by housing loan borrowers.
The initial paid-up capital of the venture will be Rs. 120 crore. The proposed mortgage guarantee company would be a NBFC. Verma said this was not the first time that NHB was taking a stake in a financial institution. It currently holds stakes in Central Bank Home Finance & Mahindra Rural Finance.
This thaw in housing loan rates will be due to the southward movement in key policy rates.
Mr R.V. Verma also said, “Upward pressure on interest rates is not there. HFCs (Housing finance companies) have already cut lending rates by 0.25%” .
Overall, NHB, which is the apex level institution for housing finance in the country, expects housing loans to grow by 20% in 2012-13, against 18% in 2011-12.
According to Mr. R.V. Verma, HFCs should be outside the purview of the 5% cap on bank loans to NBFCs (Non-banking finance companies). Else, it would go against the spirit of channelising affortable (low cost) housing finance from as many financial intermediaries as possible.
The NHB Chairman Mr. Verma referred to the fact that RBI has increased the limit for bank loans extended to non-governmental agencies, approved by NHB for their refinance, from Rs. 5 lakh to Rs. 10 lakh.
This is subject to the agencies on-lending only for construction or reconstruction of individual dwelling units (houses) or for slum clearance and rehabilitation of slum dwellers.
NHB expects to end the current financial year (July-June) with a disbursement of Rs. 15,000 crore (Rs. 13,000 crore last year) by way of refinance to banks & HFCs. NHB will disburse Rs. 17,500 crore as refinance in the July 2012 to June 2013 period..
NHB plans to securitise a small portion (Nearly Rs. 100 to 150 crore) of HFC loans. This is to demonstrate that loans can be successfully securitised under the new RBI guidelines.
Securitisation is the process of pooling loans & selling the consolidated loan as pass through certificates to various investors. This process will help HFCs become liquid & undertake fresh business.
The housing finance regulator NHB and supervisor of HFCs will also be securitising a portion of the disbursements it has made to HFCs and banks, said Mr Verma.
NHB is also reviewing refinance rates — the rate at which it lends funds to banks and HFCs.
Mortgage Guarantee company..!
A mortgage guarantee institution, promoted by NHB, has received the Foreign Investment Promotion Board’s (FIPB) approval to kick off operations, Mr. R.V Verma also said.
NHB is partnering with international institutions like the Asian Development Bank (ADB) and International Finance Corporation (IFC). NHB will have a 38% stake & will be the anchor investor. The company is being set up to compensate banks & HFCs in case of defaults by housing loan borrowers.
The initial paid-up capital of the venture will be Rs. 120 crore. The proposed mortgage guarantee company would be a NBFC. Verma said this was not the first time that NHB was taking a stake in a financial institution. It currently holds stakes in Central Bank Home Finance & Mahindra Rural Finance.
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