RBI extended the deadline for NHB
Recently RBI extended the deadline for the National Housing Bank (NHB) to raise funds through the external commercial borrowing (ECB) route, by six months. The central bank had allowed NHB and housing finance companies to collect funds up to$1 billion through this route to finance affordable housing loans up to Rs 25 lakh.
Mr. RV Verma, NHB chairman, says that they had requested RBI for the extension as in the last financial they were not very tight in terms of liquidity as they had other sources of funds like tax-free bonds.
NHB need to raise the fund within next 6 months. Mr. Verma says that firm is ready to raise the required funds before 30 June.
HDFC was the first company to collect funds through ECB when it managed to get $300 million at 1.75% above Libor. LIC Housing Finance plans to raise$300 million.
The housing finance market witnessed a growth of 19 to 20 percent in the financial year 2014. The outstanding home loans stood close to Rs 9.6 lakh crore in this year while it was Rs 8 lakh crore in last year.
Banks contributed about 65-66 percent of outstanding loans as their focus on retail loans has increased over the past two years. The banks have announced the discounts for home loan borrowers, including women borrowers.
Mr. Verma points out that the total nonperforming assets (NPAs) of the banking industry’s housing loan portfolio is at 1.81 percent and is expected to decrease by 1.8 percent.
Source: The Financial Express
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