NHB plans new loan norms

Undeterred by Housing finance regulator National Housing Bank is planning to soon come out with norms on loan securitisation in the current fiscal, CMD R.V. Verma said on Friday.

“The norms will be on the lines of guidelines announced by Reserve Bank of India for loan securitisation,” he told Express.

Under loan securitisation, various types of debt such as residential and commercial mortgages, auto loans or credit card debt obligations are pooled and sold as bonds and pass-through securities to various investors. The principal and interest on the debt, underlying the security, is paid back to the various investors regularly. Securities backed by mortgage receivables are called mortgage-backed securities while those backed by other types of receivables are asset-backed securities.

Verma said NHB is planning to focus on rural housing as part of its refinancing options in the current financial year. NHB’s fiscal runs from July 1 to June 30.

It is targeting to mobilise Rs 14,500 crore in the current fiscal through various instruments such as market borrowings, bonds, multilateral loans etc.