World Bank to give $300 mn to NHB | business | Hindustan Times
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World Bank to give $300 mn to NHB

The National Housing Bank (NHB) is set to receive $300 million (R1500 crore) from the World Bank, which would help in its refinancing programme. The agreement would be inked in the next few weeks.

business Updated: Feb 08, 2012 23:25 IST
Mahua Venkatesh

The National Housing Bank (NHB) is set to receive $300 million (R1500 crore) from the World Bank, which would help in its refinancing programme. The agreement would be inked in the next few weeks.

Besides, the housing finance watchdog has also entered into a joint venture with the US-based Genworth Financial for setting up a mortgage guarantee company. While NHB will hold 38%, Genworth will have a 36% stake in the company. Asian Development Bank and International Finance Corporation — the other two partners in the company, will have a stake of 13% each.

The exercise will help ease liquidity for banks and housing financing companies, which in turn will lend to the consumers. That apart, the move would also help in minimising risk and in case of failure of repayment of loan guaranteed by NHB, the banks and the HFCs will get an up-front payment from the new company.

“The new company is expected to be operational by June, we will immediately apply for FIPB clearance,” RV Verma, chairman and managing director, NHB told Hindustan Times. He also said that the World Bank soft loan would be for a period of 25 years.

The mortgage guarantee company will have an initial capital base of R120 crore, Verma said.