By Accommodation Times News Services
Reserve Bank of India has granted LIC Housing Finance Ltd. to raise Rs. 1,800 crore funds from foreign market through external commercial borrowings (ECBs). These funds will be utilized to section home loans to home buyers under affordable housing segment. As per the norms the average loan sectioned would be amounting from Rs. 14 lakhs to Rs. 15 lakhs.
“We have got the apex bank’s approval two days ago and the fund raising activity should be completed in the next two to three months,” said Sharma, MD and CEO, LIC HFL.
As per the last budget government had permitted Indian housing finance corporations to raise money through the ECB route. Typically, money borrowed from international markets comes at lower interest rates as compared to interest rates in India, allowing companies like LIC HFL to offer attractive interest on loans to homebuyers.
However, Sharma said that the current currency situation wouldn’t give its ECB fund raise any interest advantage. “If the rupee goes up and the dollar comes down then there could be an interest advantage. Our only advantage now is that we have another avenue to raise funds,” she said.
There is a slowdown in the economy and the real estate market is also in recession, though in the October to December third quarter LIC HFL reported a 38% jump in net profit to Rs 326.59 crore and a 21% rise in income to Rs 2,343 crore over the same period a year ago.