NHB makes changes in Refinance Policy to enable more HFCs to avail facility

By Accommodation Times News Services

logo-of-NHBNational Housing Bank has changed the Refinance Policy- Eligibility Criteria to enable more HFCs to avail refinance from NHB, since extending refinance support to them would help in improving the flow of institutional housing credit to the underserved segments.

Looking up to the capital issues being faced by Housing Finance Companies the NHB decided to facilitate to diversify the funding opportunities. Few weeks before in an interview with DNA, Sriram Kalyanaraman, Managing Director and Chief Executive Officer, NHB, had asserted that bank is in the process of formulating guidelines for new and smaller companies to access our refinance so that smoother flow of funding happens to them.

The change in refinance policy is in terms of following criteria Eligibility Criteria for New HFCs It is decided to dispense with the additional criteria prescribed for new HFCs.

Thus, the criteria would be the same for all HFCs irrespective of their age. New HFCs should comply with the following conditions:

  • Minimum 75% of capital employed in long term finance for housing.

For the purpose of the above stated eligibility clause, ‘long term borrowings’ is taken to mean ‘borrowings made for a period of five years and above’, and ‘long term finance for housing’ is taken to mean ‘housing loans extended for a period of five years and above’

  • Minimum Net Owned Fund (NOF) of 10 crore
  • Net Non-Performing Assets to Net Advances ratio not exceeding 2.50%
  • Capital Adequacy Ratio not less than 12% (as per NHB’s regulatory norm)

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