Home loans provided to a borrower for the third time should not be treated as commercial real estate advance, the National Housing Bank has suggested to finance ministry.

NHB is of the view that such an approach would help improve housing stock in the country and also give a fillip to rental housing market, R.V.Verma, Chairman & Managing Director, told Business Line here.

Treating the third loan of a borrower as commercial real estate advance would imply higher provisioning requirement for banks in case of any slippages, it was pointed out.

It is being felt this would constrain resources of the banks. NHB is the housing finance regulator of the country.

TAX FREE BONDS PUBLIC ISSUE

NHB is likely to tap the market with public issue of tax-free bonds in the last week of December, Verma said.

The issue size including greenshoe option is likely to be about Rs 2,100 crore, Verma said.

There will be only one public issue and no multiple tranches will be there, he said while pointing out that NHB had already raised about Rs 900 crore through private placement.

The Central Board of Direct Taxes had given its nod for NHB to mobilise Rs 3,000 crore through tax free bonds during current fiscal.

>srivats.kr@thehindu.co.in

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