NHB rules affect the flow of liquidity to housing

MUMBAI: The liquidity service of Rs 30,000 million for the housing sector made available by the government through the National Housing Bank (NHB) has not gained traction due to the onerous conditions linked to it.

The finance minister in the Budget for the current prosecutor had announced an installation of 20,000 crore through NHB. This was completed with an additional installation of 10,000 million rupees announced in August this year. In a letter to the Prime Minister, the Assocham industry agency said there are delays in the implementation of the scheme due to the terms of the NHB Act to lend to housing financing corporations (HFC).


“The Law establishes the exclusive collection of assets to NHB to grant loans to HFC. No existing lender for HFC will accept a new lender to obtain the exclusive charge of the assets unless the entire loan is refinanced, ”said Assocham president Balkrishna Goenka.

Assocham has suggested that the NHB board approve the direct allocation of HFC construction loans at 50% of the value of the loans. “Today, HFCs are not providing any incremental financing for construction projects since construction loans have no liquidity. This direct allocation route will break the deadlock and once the HFCs see that 50% liquidity can be achieved, they will start lending again for construction, ”the letter said.

According to Siddhartha Mohanty, CEO, LIC Housing Finance , the question of the first position can be resolved through debates, since the objective is to provide liquidity to the sector. The industry also looks forward to the operation of the Alternative Investment Fund of Rs 25,000 million for the resolution of real estate projects that have been classified as NPA.

This fund, which was announced by FM in November, will have contributions from the government, LIC and SBI. The government will meet with the lenders this week to finalize the terms of the scheme. According to the government, the Rs 25,000 million fund will help revive 4.6 lakh housing units in 1,600 projects and allow the sale of these projects and loan recovery. However, other lenders feel that stagnant projects in real estate are having a cascading impact. These projects are being registered as NPA in the books of financial companies.