Housing finance regulator, National Housing Bank, has received nod from the Foreign Investment Promotion Board (FIPB) to float its mortgage guarantee company and will raise Rs 120 crore of paid up capital in the next two weeks for the same, a top bank official said here on Friday.

“We have already received FIPB approval to float our mortgage guarantee company and will raise Rs 120 crore in the next two weeks,” NHB Chairman & Managing Director, Mr R V Verma, told reporters on the sidelines of the Skoch summit here.

He said that International Finance Corporation (IFC) and Asian Development Bank (ADB) will partner NHB in forming the mortgage guarantee company.

A mortgage guarantee company provides credit guarantee to housing finance companies and banks on behalf of home loan borrowers.

Mr Verma also said home loan rates are likely to come down by 25—50 basis points in the current financial year, given the probability of reduction in policy rates.

The NHB, which is likely to disburse Rs 15,000 crore by the financial year ending in June, is hopeful of disbursing around Rs 17,500 crore in the next financial year (July—June).

Published on June 8, 2012