The Hindu Business Line : NHB refinance package for bank loans to J&K quake victims

THE National Housing Bank (NHB) has announced a Rs100-crore concessional refinance scheme for Jammu & Kashmir in the wake of the devastation caused by the recent earthquake.

The refinance scheme would be to provide assistance through scheduled banks and housing finance companies (HFCs) to people in the affected areas for construction/repairs and renovation of houses, Chairman and Managing Director, National Housing Bank (NHB), Mr P.K. Gupta, said.

Under the scheme, refinance assistance would be available to banks and HFCs to the extent of 100 per cent of housing loans given by them, on or after October 10, 2005, to individual borrowers affected by the earthquake.

The refinance assistance for loans for construction/purchase of new houses would be available for an amount of up to Rs 5 lakh and for repairs & upgradation, refinance assistance would be available for amounts up to Rs one lakh.

The refinance would be extended at a concessional rate of 5.50 per cent as against the normal rates of 6.75 per cent and above. Banks and HFCs have been directed not to charge interest higher than 6.50 per cent from the ultimate borrowers.

The refinance assistance could be extended up to a maximum period of 15 years as against 10 years under the normal refinance scheme.

NHB has also said that a moratorium on payment of principal would be made available for a maximum period of two years. In deserving cases, a moratorium on payment of interest for two years would be available along with a provision for interest capitalisation during the moratorium period. These benefits are not available under normal refinance scheme, Mr Gupta said.

As a special case, based on their assessment of the demand, banks/HFCs can also avail refinance assistance from NHB for their prospective disbursements to the earthquake victims.

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