National Housing Bank (NHB) is looking to raise up to $100 million through external commercial borrowing (ECB) to refinance individual loan borrowers in the affordable housing segment.

The guidelines and actual quantum that could be raised will be decided by the Reserve Bank of India, R.V. Verma, Chairman and Managing Director of NHB told Business Line here.

The housing finance regulator has already approached the RBI with an indicative plan to raise up to $100 million via the ECB route.

The move will diversify NHB’s resource base and generate confidence among international investors in the Indian housing finance market, Verma said.

While RBI is expected to specify the end-use of any ECB raised for affordable housing, Verma said the borrowing raised could also be used for urban low-income housing, which is a separate scheme.

Low-income housing is a new thrust area for NHB, which recently slashed refinance rates on loans up to Rs 5 lakh.

The reduction in refinance rates is expected to incentivise primary lending institutions such as banks and housing companies to lend more to low-income households — those not having income above Rs 15,000 a month — and also those in the informal sector.

The Government has already decided to allow ECBs for low-cost housing projects. At a meeting of the high-level committee on ECBs on Wednesday, it was decided that entities such as NHB and housing finance companies will be included as eligible borrowers for financing low-cost projects.

The meeting also decided that SIDBI would be permitted as an eligible borrower for accessing ECBs for on-lending to the MSME sector, subject to certain conditions that will be finalised in consultation with the RBI.

> srivats.kr@thehindu.co.in

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