The Reserve Bank of India has opened up the External Commercial Borrowing (ECB) route to give a fillip to low-cost affordable housing projects.
The central bank has allowed developers/ builders to tap the external commercial borrowing (ECB) route for low-cost affordable housing projects.
Housing Finance Companies (HFCs)/ National Housing Bank (NHB) can also use the ECB route for financing prospective owners of low-cost affordable housing units.
Developers/ builders as well as HFCs and NHB can tap the ECB under the approval route.
A low-cost affordable housing project for the purpose of ECB will be a project in which at least 60 per cent of the permissible floor space index would be for units having maximum carpet area up to 60 square meters.
Slum rehabilitation projects will also be eligible under the low cost affordable housing scheme, the RBI said in a notification.
The RBI said ECB proceeds can be utilized only for low cost affordable housing projects and not for acquisition of land.
Builders/developers meeting the eligibility criteria will have to apply to the NHB, which will act as the nodal agency for deciding a project’s eligibility as a low cost affordable housing project.
On being satisfied, NHB will forward the application to the Reserve Bank for consideration under the approval route.