New Delhi, Oct. 7 (PTI). The National Housing Bank (NHB) is planning to tie up with Asian Development Bank, International Finance Corporation and Canada Mortgage Housing Corporation for setting up a company which would offer credit against mortaged properties and securities.
“We are planning several credit enhancement measures to boost the housing sector. One of them is setting up of a mortgage credit company,” NHB executive director R.V. Verma said. He said talks are on with ADB, IFC and Canada Mortgage Housing Corp for picking up equity in the company. The modalities are yet to be finalised. “NHB may hold majority 51 per cent stake in the company,” Verma said, adding the joint venture is slated to be finalised by June 2003.
NHB, a wholly-owned subsidiary of Reserve Bank of India, has paved the way for companies to come up with mortgage-backed securities (MBS) in the country to enable housing finance companies and banks to mop up additional resources by securitising housing loans from 1999-2000. “The proposed company will add value to securitisation market by enhancing credit offtake. The company will provide insurance and guarantee to investors who invest in mbs of the housing finance companies,” Verma said.
Speaking about the securitisation market, he said at least 10 companies are lining up MBS issues worth over Rs 600 crore in the coming months of this fiscal. Citibank and Canfin Home is slated to tap the market with MBS worth Rs 100 crore each while BoB Housing Finance and PNB Housing Finance are planning Rs 50 crore mopup each.