With the demand for external commercial borrowings (ECB) for low-cost housing precariously close to the annual limit of $1 billion set by the Reserve Bank of India for the current fiscal, the National Housing Bank (NHB) is planning to petition the RBI seeking a hike in the limit.
Till December 2012, the demand for ECBs from housing finance companies (HFCs) and builders was estimated at $900 million.
RV Verma, CMD, NHB told The Indian Express that they have already received demands of around $900 million from HFCs and builders and since there is demand for more they will ask RBI and government to raise the limit.
“While there are more requests in the pipeline, once the current limit is reached, we will substantiate our request to increase the limit beyond $1billion,” said Verma.
HFCs along with NHB have applied for an aggregate of around $800 million and request for around $150 million has come from the builders. “We have already sent the request to RBI,” said Verma.
While the RBI had set a limit of $1billion in FY2012-13, the housing ministry is yet to come out with the guidelines for the Slum Rehabilitation Projects that can raise funds via the ECB mode.
Omkar Realtors and Developers, specialising in slum rehabilitation projects in Mumbai, said that they are waiting for the guidelines and will apply to raise anywhere between Rs 250-500 crore. “The cost of funding through the ECB route will be cheaper by 4-5 percentage points than our normal route of funding,” said Manoj Paliwal, CFO, Omkar Realtors and Developers.