 "Real Estate Regulator Bill will see light of the day sooner: RV Verma")
The decision on the real estate regulator bill has been deferred by the union cabinet. When can it be expected now?
It’s only a matter of time as this is a critical need and will serve the larger consumer interest and transparency in the sector. This will, in turn, have a number of positive implications including larger flow of funds, better credit availability and lower risk. All this will result in more efficient and transparent pricing and enhanced confidence amongst the lending institutions.
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This will be akin to reforms in the real sector ( supply side), which has so far lagged behind as compared to the reforms in the financial sector including mortgage finance market. We are optimistic that the bill will see the light of the day sooner than later as it is in the interests of all stakeholders.
You have said in the recent past that disbursements in 2013-14 will be better than previous fiscal. What all factors will contribute to your disbursement growth in the new fiscal?
Yes, that’s right. We will be closing this year June 30, 2013 with the highest ever disbursement of the bank during any single year at a little above Rs 18,000 crores. NHB has also recently crossed an important milestone of total refinance of Rs 1 lakh crores.
The home loan market, both for the Primary Lending Institutions (PLIs) and the refinancing institution NHB, has seen robust and sustained growth. The year 2012-13 for the PLIs has shown a growth of about 19 per cent which is likely to remain so, if not improve further, in the year 2013-14. NHB’s refinance schemes cover a wide spectrum of lending done by the PLIs.
The NHB also is supported by the government and Reserve Bank of India (RBI) in terms of allocation of resources (Rs 6,000 crore under the Rural Housing Fund and Rs 2000 crore under the Urban Housing Fund for the year 2013-14), which helps us expand our operations and extend support to the PLIs in lending to the under-served market segments in terms of govt. priority and public programmes. Besides, NHB’s thrust on low and moderate income housing has given us a low average loan size (in terms of refinance) at around Rs 9-10 lakhs.
NHB is also encouraging lending in niche areas such as energy efficient residential housing projects and solar water heating & solar lighting equipments for domestic use, in line with the govt.’s thrust on encouraging energy conservation, energy efficiency and use of alternative renewable energy sources. We see a growing passion among the people for green and clean energy environment, including in rural areas.
How successful has CERSAI emerged as when it comes to preventing fraudulent transactions in real estate?
In just about two years of its operation, CERSAI has developed into an important source of information and data on transactions relating to equitable mortgages. The central registry or the CERSAI portal has nearly 84 lakh transactions parked on its platform which is being actively visited by the banks and housing finance institutions and all other lending agencies qualified under SARFAESI Act.
These include both subsisting mortgages as well as new ones created after the setting up of CERSAI. It is encouraging to receive very positive and valuable feedback from the industry on the usefulness of the portal and the quality of data.
The CERSAI has subsequently also included factoring transactions, involving 12 number of factors in the country as the data on the CERSAI portal provides the status of encumbrance or creation of charge on a particular underlying property, the lenders visiting the portal can thus avoid creating a second charge or lending against the same property through misrepresentation by the borrower.
The portal also provides for updation and satisfaction of the charge once the loan is fully amortized. While this helps preventing multiple lending against the same property at the individual transaction level, the CERSAI portal also mitigates the risk at the sector level, enhancing the confidence of the lenders and resulting in improved flow of credit. As a further add-on measure, we have connected the CERSAI with the major credit bureaus in the country namely CIBIL, Equifax and
Experion as a result of which the lenders are able to access credit information / history also through the CERSAI portal. An important message underlying this integration is that the credit risk emanating from frauds and misrepresentation as well as from the credit profile of the borrowers needs to be mitigated through an organized and integrated system of information availability which is quick, reliable and cost effective.
We are planning to open up the CERSAI portal to public view by mid June 2013. We are working to provide a seamless payment gateway system for the individual members of public to enter the site and check on the information relating to the properties they would be transacting in.
You plan to raise Rs 14,000 crore this fiscal. Will it also include a tax-free bond issue? Considering last fiscal's issue was not successful, how do you plan to go about it this fiscal?
Yes, we believe there a good appetite for tax-free bonds among retail investors which requires a great deal of time and planning. Besides the retail market, I feel a little more aggressive marketing with more realistic and competitive pricing can whet the appetite of institutional investors as well, banks, financial institutions and corporates.
How much you have raised through your term deposit scheme last fiscal? Considering interest rates are headed downwards do you plan to revise the rates this fiscal?
Frankly, the term deposits form a very small part of our resources but help us remain connected with the retail depositor community. We have not aggressively pursued our retail deposits but there is good potential and we will take measured steps in this direction.
We keep close watch on our cost of funds as also the prevailing interest rate regime and future outlook to take a considered view on our resource profile as also our lending rates. As a Development Finance Institution (DFI), you will appreciate that NHB operates on thin margins.