To further ease the funds for the housing sector, National Housing Bank (NHB) will provide additional liquidity infusion facility of Rs 10,000 crore to Housing Finance Companies (HFCs). This will be an additional liquidity infusion for individual loans for affordable housing.
The Finance Ministry launched the Liquidity Infusion Facility (LIFt) Scheme for Housing Finance on Friday. This new scheme will cater to the demand of HFCs to address the housing finance requirements in the affordable housing finance sector.
The objective of the refinance scheme is to support HFCs in creating individual housing loan portfolio that falls under the priority sector, as defined by the Reserve Bank of India.
The liquidity infusion by NHB may create confidence in the market in HFCs and thus they will be able to raise more resources from other sources like banks or the debt market. The purpose of the new scheme is to create individual housing loans portfolio of the HFCs within the next three months.
HFCs will be utilising the facility for financing individual housing loans only. According to the new scheme, the rate of interest will be as per the extant pricing policy plus 1 per cent per annum, monthly compounding. If the facility is availed under floating rate, the interest rate will be reset after one year or three years as the case may be.
To the extent of the unutilised amount under this sanction, the rate of interest will stand revised to 2 per cent per annum over the extant pricing policy rate from the date of availing the loan. LIFt facility shall be over and above the two existing refinance schemes of NHB.
Finance Minister Nirmala Sitharaman will be meeting heads of public sector banks and heads of major private sector banks on August 5 to review matters relating to growth of credit in various important sectors of economy such as MSME, retail, automobiles, affordable housing, NBFCs or HFC and areas of priority for the banking sector in coming months for accelerating GDP growth.
Apart from this, the minister will be holding a meeting next week with the concerned stakeholders including the Ministry of MSME, Ministry of Electronics and Information Technology, Ministry of Rural Development of Health and Family Welfare, Ministry of Corporate Affairs, Department of Commerce, Industrial Promotion, Telecom to finalise decisions and timelines for action in this regard.
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