NHB looks for partner for its JV Mortgage Guarantee Co

NHB looks for partner for its JV Mortgage Guarantee Co
The Financial Express, July 30, 2009, Page 13

fe Bureaus, kolkata

The proposed Indian Mortgage Guarantee Company, in which National Housing Bank (NHB) will have a majority stake, is scouting for a partner after AIG subsidiary United Guarantee Corporation shed its stake. While other partners will remain in the joint venture, there may be a restructuring in the shareholding pattern.

“We have already done a fair amount of work towards that and talked to a few potential partners,” NHB chairman and managing director S Sridhar said. While he did not mention any time frame, he said, “It will depend on how soon we complete an agreement with the partner,” he said.

The mortgage guarantee firm, which is likely to start with a capital of Rs 120 crore, and has been in the works since 2002, aims to provide an efficient platform for Indian banks to transfer their loan risks. Sridhar, talking at the banking conclave organised by Ficci said the National Housing Bank will remain the majority stakeholder since it will drive the joint venture.

“NHB needs to have some supplementary expertise from the people who have done mortgages. Even RBI guidelines require that one of the partners must be experienced in that. We are looking for partners in the developed country markets,” he said.

In the earlier structure, NHB held a 43% stake, AIG 41%, International Finance Corporation and Asian Development Bank held 8% each in the JV. But the AIG subsidiary quit the JV last year.