NHB
to revise housing loan schemes
Our Banking Bureau
3 November 2001
Mumbai:
The National
Housing Bank (NHB), the refinancing agency for housing finance
companies, proposes to increase the loan period for housing loans.
Presently, the maximum
loan period under which the NHB refinances is 10 years - this will
be increased to 25 years. The down payment, which is currently 30
per cent of the total cost of the house, will also be brought down
to 5 per cent.
NHB will also be
introducing a mortgage credit guarantee scheme for the Indian
market. The scheme will protect lending institutions against any
default by their borrowers. “The purpose is to enable primary
lending institutions to lend more widely, apply more reasonable
standards, not be too conservative and lend in all segments of the
population and all parts of the country,” NHB executive director
RV Verma said.
The scheme will be
launched through a new subsidiary of the NHB, a 51:49 per cent
joint venture with the Canada Mortgage and Housing Corporation.
The proposed subsidiary will have an initial capital of Rs 100
crore and will be set up by April 2002.
“The housing sector has
to be put on a fast-forward mode to compete
with other sectors. To achieve
that, appropriate institution building, in tune with the best
global practices, has to be adopted. Ours is an initiative in that
direction,” Verma said.
NHB’s proposal has been
placed before Finance Minister Yashwant Sinha, who has accorded an
in-principle approval to the proposal.
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