Tag: NHB

Housing FinanceLatest Stories

HFCs Gain NHB Support to Diversify Funding, Lower Loan Costs

MUMBAI: Housing finance companies (HFCs) are set to experience reduced borrowing costs following the National Housing Bank’s (NHB) approval of partial credit enhancement (PCE) for bonds they issue. This initiative aims to enable HFCs to pass on the benefits of lower funding costs to borrowers, particularly those in the affordable housing sector. In a letter dated October 6, the NHB notified housing finance companies that it would offer PCE on secured non-convertible debentures (NCDs) they issue, with the goal of helping them “diversify their funding sources” and “reduce reliance on banks.” The NHB stated that the facility would only be…

Housing FinanceLatest Stories

NHB directs housing finance firms to pay interest on advance EMIs

The National Housing Bank (NHB) has instructed housing finance companies to provide interest on advance payments made by borrowers that have not been immediately applied to their Equated Monthly Instalments (EMIs) and are instead held in sundry or suspense accounts, according to sources familiar with the situation. The interest should be paid at the same rate applicable to the customer’s home loan. This initiative aims to ensure fair lending practices and prevent borrowers from incurring excessive interest costs when their advance payments are not applied promptly. “NHB is fundamentally ensuring that housing finance companies cannot profit from holding onto customers’…