Interest rates on home loans could soften by 25-50 basis points in the current financial year, said Mr R.V. Verma, Chairman and Managing Director, National Housing Bank.
This thaw in home loan rates will be due to the southward movement in key policy rates.
“Upward pressure on interest rates is not there. Housing finance companies have already cut lending rates by 25 basis points,” said the NHB chief on the sidelines of the Skoch summit.
Overall, NHB, which is the apex level institution for housing finance in the country, expects home loans to grow by 20 per cent in FY13, against 18 per cent in FY12. NHB is a wholly-owned subsidiary of Reserve Bank of India.
Lending cap to NBFCs
According to Mr Verma, housing finance companies should be outside the purview of the 5 per cent cap on bank loans to non-banking finance companies. Else, it would go against the spirit of channelising low-cost housing finance from as many financial intermediaries as possible.
The NHB chief referred to the fact that RBI has increased the limit for bank loans extended to non-governmental agencies, approved by NHB for their refinance, from Rs 5 lakh to Rs 10 lakh.
This is subject to the agencies on-lending only for construction/reconstruction of individual dwelling units or for slum clearance and rehabilitation of slum dwellers.
Refinance
NHB expects to end the current financial year (July-June) with a disbursement of Rs 15,000 crore (Rs 13,000 crore last year) by way of refinance to banks and HFCs. NHB will disburse Rs 17,500 crore as refinance in the July 2012-June 2013 period, said Mr Verma.
Securitisation
NHB plans to securitise a small portion (about Rs 100-150 crore) of HFC loans. This is to demonstrate that loans can be successfully securitised under the new RBI guidelines.
Securitisation is the process of pooling loans and selling the consolidated loan as pass through certificates to various investors. This process will help HFCs become liquid and undertake fresh business.
The regulator and supervisor of HFCs will also be securitising a portion of the disbursements it has made to HFCs and banks, said Mr Verma.