| In its pre-Budget wish list submitted to the finance ministry, the apex housing finance institution has also asked the government to include residential mortgage-backed securities under the Securities Contract (Regulation) Act, which would enable the holders of the securities to trade in them. |
| "The move will create liquidity and help in the development of the market," NHB chairman P K Gupta said. He added that only about 5 per cent of the housing loans of Rs 120,000 crore had been securitised. |
| "If the PTCs are included under the SCRA, there would be much more activity in the market and more companies and banks would come forward for securitisation," Gupta said. |
| He also said that permission to housing finance companies and NHB would help raise cheaper funds and reduce the cost of housing loans. |
| According to the NHB chief, the refinance extended by the institution had increased nearly five-fold to over Rs 4,000 crore during the current financial year against Rs 886 crore during 2003-04. |
| He said the market for housing loans was expected to continue to grow by around 28 per cent. Banks and housing finance companies had extended home loans of around Rs 55,000 crore last year, as against Rs 41,000 crore in 2002-03. |
| "The action is, however, confined to the metros and the urban centres while the real Bharat lives in rural areas," Gupta said, adding that NHB would tie-up with self help groups to increase the reach of housing loans to rural areas. |
| It has tied up with Sri Padmavathy Mahila Abhydaya Sangham, Tirupati, a SHG, to finance the construction of 300 housing units. |
| While the cost of each dwelling was estimated at Rs 60,000, NHB's loan component would be Rs 50,000 and it would charge 6.5 per cent interest against 7.5-9 per cent it charges from the others. |
| Gupta said NHB was targeting to extend loans of around Rs 100 crore for such projects during the next financial year. |
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