The increase in capital is required for resource mobilisation to fuel future expansion plans envisaged by the Jaipur-based company in which BoB has 67 per cent stake and National Housing Bank (NHB) 33 per cent. BoB housing has charted out a scheduled set of expansion plans to corner considerable business for itself following the new thrust given by the Government to promote housing sector in the country.

BoB Housing had recently offered a rights issue of 74,00,000 equity shares of Rs 10 each at par to NHB and BoB. The latter has subscribed fully to it's share (Rs five crore) and NHB would be chipping in it's Rs 2.40 crore share after it's board meets. Incidentally, the issue, to have closed on June 3, got an extention of two months.

At present BoB holds Rs 5.10 crore and NHB Rs 2.50crore in the Rs 7.60 crore equity.

Talking to The Financial Express BoB Housing managing Director CH Palan said the current fiscal would see the BoB subsidiary offering another bout of rights of 50,00,000 shares to it's two promoting companies. This would take up the paid-up equity to Rs 20 crore.

Palan, who was here in connection with a roadshow of the housing company, disclosed he is "approaching other banks too to mobilise resources but nothing concrete has taken place as of now".

BoB Housing would be exploiting channels of resource mobilisation like public deposits, bonds/debentures in due course depending on the cost-benefit consideration once it's area offices are fully equipped with all infrastructure facilities. It is also keeping the public issue route open.

The company has set an ambitious disbursement target of Rs 185 crore for 1999-2000 financial year for individual housing loans against 1998-'99 target of Rs 80 crore. "We achieved Rs 28 crore for the first two months of the currentyear against Rs 9 crore disbursed during April and May 1998-'99," Palan added.

To provide impetus to it's growth BoB Housing would link loans below Rs 10 lakh to PLR in due course. At present only those above Rs 10 lakhs have floating rates of interest. It would seek the board's permission to introduce a variable instalment scheme package envisaging revision of EMI every two years and flexibility for premature closing.

Expansion and strengthening of branches would coincide with infusion of fresh funds. All loans would be sanctioned on-line from October 1 by which time the branches would be linked to headquarters.

According to Palan, the recruitment policy approved by the board would be implemented soon. BoB Housing plans to recruit around 60 people in next three years to replace officials deputed from BoB who would return back to the parent fold.

The board would also be approached for okaying a scheme to fund, up to a maximum of Rs 50,000, existing clients in furnishing their houses.