NHB to set up mortgage guarantee firm by March

NHB to set up mortgage guarantee firm by March
Business Standard, July 9, 2009, Section II, Page 2

Newswire18 / Mumbai

National Housing Bank (NHB) plans to set up a mortgage guarantee company by March, Executive Director R V Verma said today. NHB, which will hold majority stake in the mortgage guarantee company, has identified Asian Development Bank and International Financial Corporation as the two other stake holders.

The mortgage guarantee entity would have an initial capital of Rs 120 crore, against the minimum requirement of Rs 100 crore set by the Reserve Bank of India, Verma said.

Verma was talking on the sidelines of the India Securitisation Summit 2009 organised here by National Institute of Securities Markets.

“Mortgage guarantee will be a product offered by the company that will support loans and advances given by lending institutions,” Verma said. The formation of the company will trigger more credit flow and help lenders reach out to larger geographical areas, he said. Separately, Verma said, there is revival in the housing sector due to low interest rates, improvement in credit availability and fall in property prices.