Funding for the initial capital of India Mortgage Guarantee Corporation (IMGC) was completed on June 29 with all the four shareholders pumping in the pledged amount.
The National Housing Bank, Genworth, Asian Development Bank and International Finance Corporation have brought in the promised funds towards the equity capital, said Mr R. V. Verma, Chairman and Managing Director, National Housing Bank (NHB).
To approach RBI
This would pave the way for IMGC, the country’s first mortgage guarantee company, to soon approach the Reserve Bank of India (RBI) for certificate of registration.
Mr Verma said that IMGC would be commercially operational in, say, about a month’s time from the date of receipt of registration certificate from the central bank.
IMGC is currently capitalised at Rs 120 crore. The Foreign Investment Promotion Board (FIPB) had recently given its nod for foreign shareholders — Genworth (36 per cent stake), ADB (13 per cent) and IFC (13 per cent) to infuse funds into the company.
NHB will have 38 per cent stake in the mortgage guarantee company.
“IMGC’s operations will bring greater depth and reach in the housing finance market along with stability. NHB has been part of this project through the years and we are glad that the company has been set up now,” Mr Verma said.
Primary clients
IMGC will provide credit guarantees to banks and HFCs on behalf of the borrowers. The lending institutions, having taken guarantee cover from a mortgage guarantee company, can benefit from capital relief against loans through lower risk weightages.
The mortgage guarantee company’s primary clients will be housing finance companies and banks that are at present responsible for the majority of mortgage lending in India.