NHB hopes for more easing in ECB norms for housing fin cos

The National Housing Bank on Monday said it was looking forward to some relaxation in the external commercial borrowings (ECBs) norms for housing finance companies (HFCs) to enable larger number of participants to tap the route.

"We are expecting to modify some of the features (with regard to ECBs), which are a little restrictive now," NHB chairman and managing director R V Verma said. "This is being considered by RBI and the government to allow more players," he added.

"The RBI has already sent its recommendations to the government which are being considered on the share capital and networth of HFCs," Verma said.

"The existing norms with regard to Rs 50 crore of paid-up capital and Rs 300 crore of net-owned funds (NOFs) are being examined to allow more participants in the ECB fold," he said. The RBI had allowed real estate developers, developing low-cost housing, and housing finance companies to raise up to USD 1 billion through ECBs last fiscal.

Verma also pointed out that the ECB limit for FY14 would be determined after exhausting the limit for FY13. The NHB has also sought some clarifications from the finance ministry regarding tax exemption in securitisation deals. "We are awaiting some clarifications from the finance ministry with regard to securitisation," Verma said, adding that the housing finance regulator will go ahead with the proposed Rs 200-crore securitisation deals after the clarification.

The FY14 Budget has provisions to exempt ecuritisation trusts from taxation. On loan disbursements, Verma said the NHB plans to increase loan growth by 20 percent next fiscal. (NHB follows July-June financial year). "We plan a 20-percent growth in loan disbursement to Rs 20,000-21,000 crore in the next fiscal from the Rs 17,000-crore target for this financial year," he said.

Verma also pointed out that the proposed Urban Housing Fund to support affordable housing in urban areas would open in a month's time.