National Housing Bank in talks with credit bureaus for sharing data on borrowers

To curb the possibility of beneficiaries availing of multiple home loans under the government’s credit-linked subsidy scheme, the National Housing Bank (NHB) is working on a mechanism whereby lending institutions will share details of these loans with credit information bureaus (CIBs).

NHB, the apex institution for housing finance in the country, is in talks with the bureaus, according to Sriram Kalyanaraman, MD and CEO.

The NHB chief said, “How do I know Mr ABC is not taking two loans or two subsidies? So, the workaround we have found is we are going to use extensively the credit bureaus.

“We are already in discussion with the bureaus whereby all banks will upload another column in the datasheet about beneficiaries who have availed themselves of a subsidy. So, that is a permanent record that anybody can go back and take it (check)….”

Under the credit-linked subsidy scheme (CLSS), subsidy is provided on home loans (of up to ₹6 lakh) taken by eligible urban poor (economically weaker sections/low-income groups) for acquisition, construction of house.

CLSS beneficiaries seeking housing loans from banks and housing finance companies are eligible for an interest subsidy of 6.5 per cent for loans up to 15-year tenure.

CIBs are geared towards tracking the repayment history of individual borrowers in order to provide commercially viable data to market participants.

Information from them can help lending institutions assess and monitor the creditworthiness of individual borrowers. The Reserve Bank of India has stipulated that every credit institution should be a member of at least one CIB.

Explaining the mechanics of CLSS, the NHB chief observed that an individual cannot have a house in Aurangabad and go to Pune and try and get another flat under CLSS.

“One of the declarations I (as a home buyer) need to make (to avail of CLSS) is I don’t own a house anywhere in the country. The whole scheme is aimed at maximising the government’s money to make every individual own a house. Only then will the dream of housing for all come true,” he said.

Kalyanaraman felt that the advantage of this move will be that multiple benefits utilised by an individual will get reduced and the government could extend its scheme to all the beneficiaries rather than money being diverted to the same member.

The government’s ‘housing-for-all’ mission seeks to address a housing shortage of two crore (1.80 crore slum households and 20 lakh non-slum urban poor households) via the CLSS.

The CLSS will cover the entire urban area consisting of 4,041 statutory towns with initial focus on 500 Class-I cities.

It will be implemented in three phases — phase-I (April 2015 - March 2017) covering 100 cities to be selected from States/UTs according to their willingness; phase - II (April 2017 - March 2019) to cover additional 200 cities and phase-III (April 2019 - March 2022) to cover all other remaining cities.

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