The Hindu Business Line : NHB loan at 5% for tsunami victims

THE National Housing Bank (NHB) will extend refinance to banks and housing finance companies at a concessional rate of 5 per cent against loans provided to individual borrowers affected by the Tsunami tragedy.

The banks and HFCs in their turn would not charge interest higher than 6.5 per cent from ultimate borrowers, said a news release from NHB today.

This is part of a concessional scheme from NHB providing financial assistance to the people in the tidal waves-affected States in the country.

NHB will also extend project finance to public agencies such as housing boards, development authorities, municipal corporations, slum clearance boards and other similar institutions at a concessional rate of 5.5 per cent.

The loans are to be extended for 15 years including two years of moratorium on payment of principal and interest capitalisation during the construction period.

Another salient feature, said NHB, would be the procedural simplicity with banks and HFCs being allowed to claim refinance under this scheme for disbursals made by them on or after January 1, 2005.

"Detailed guidelines are being issued by NHB in this regard," said the news release.

NHB said it expected a good response from banks and HFCs to these schemes in the context of large drawals of refinance witnessed during the current year. "The refinance assistance during the six months (July-December, 2004) had been to the tune of Rs 4,050 crore, as against Rs 3,253 crore during the corresponding period of the pervious year.

A sum of Rs 100 crore has been earmarked for the purpose of the scheme, said Mr P.K. Gupta, Chairman & Managing Director, NHB.

Based on the feedback received from beneficiary institutions, NHB would also be willing to consider modifications in the scheme, said the release.

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