Moneycontrol News
National Housing Bank (NHB) has increased the refinance limit for the period between July 2018-June 2019 to Rs 30,000 crore from Rs 24,000 crore for eligible institutions.
"Keeping in view the current scenario, NHB has decided to increase the refinance limit to Rs 30,000 crore. Now, eligible housing finance companies & other entities will have increased availability of funds," the finance ministry said in a press release.
NHB is the principal agency to promote HFCs, currently 97 in number, and to provide financial support to eligible institutions.
After the recent defaults by Infrastructure Leasing and Financial Services (IL&FS), fears of a cash crunch intensified in both the debt and equity markets.
Further, panic struck after it became known that in an internal communication with banks around mid-September, the RBI had assessed the health of the top 20 HFCs, six (smaller ones) of which had relatively-high risk profiles. As a result, banks were asked to reduce their exposure to these HFCs, a source had told Moneycontrol recently.
As a regulator, NHB regularly monitors the liquidity position of such non-banking financial companies(NBFCs).
A lot of NBFCs have also given loans against properties and they are now facing liquidity crunch given the stagnancy in the real estate market prices and the economy
"Till date, Rs 8,835 crore has been sanctioned. This refinancing is a credit flow to HFCs and other institutions," the release said.
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