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Mr S. Sridhar

Our Bureau

New Delhi, Sept. 25 National Housing Bank (NHB), a market-oriented development financial institution, plans to launch slew of products including conventional fixed deposit type schemes targeted at the retail market as part of its resource mobilisation exercise for financial year 2008-09, running from July 1, 2008 to June 30, 2009.

Plans are afoot to launch a deposit programme of five years and above with Section 80C benefits for the depositors and a Rs 3,000 crore zero-coupon bond issue, which will also be offered to retail investors, Mr S. Sridhar, Chairman and Managing Director, NHB, said here on Thursday.

For its financial year 2008-09, NHB aims to borrow Rs 9,000 crore, of which Rs 3,000 crore has already been raised, lower than the borrowing of Rs 12,100 crore in the previous year. The requirement to borrow has come down this year as more repayments are expected during this year, Mr Sridhar told Business Line.

NHB has already got Government approval to launch zero coupon bonds amounting to Rs 3,000 crore. It is yet to get Government approval for fixed deposit type programme of five years and above with Section 80C benefits for depositors.

“Depending on market condition, we will be launching zero coupon bonds and fixed deposit type programmes. We are watching the market. It will happen this fiscal”, Mr Sridhar told reporters after announcing NHB’s annual results for the year ended June 30, 2008.

For the year ended June 30, 2008, NHB has reported a record net profit of Rs 170 crore, an increase of 68 per cent over the previous year.

Operating profit for the year under review stood at Rs 270 crore, a 32 per cent increase over last year. NHB expects to disburse Rs 11,000 crore in 2008-09 as against Rs 9,036 crore in the previous year.

Mr Sridhar said that the Reserve Bank of India has allowed NHB to plough back the entire earnings, increasing the net owned funds of the institution.

At this stage of operations, NHB is not looking at extra capital. It has a capital adequacy ratio of 24 per cent. “We are substantitively capitalised. Capital is expensive these days. I am not sure if we need extra capital”, he said.

Meanwhile, NHB Chief said that there is slowdown in growth in demand for residential housing in urban areas. “I think this will continue for sometime looking at the overall scenario. There is some cooling of prices in certain pockets”.

“Since the real housing sector is slightly slowing down, we would expect the housing loan market will slow down. In a way it is good as the speculative element is removed, There was a degree of speculation and that to a large extent has now died down. Then we will have core genuine demand”, Mr Sridhar said.

More Stories on : Fixed Deposits | Housing Finance | Corporate Bonds

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