FIPB nod for NHB-led mortgage guarantee co

Written by feBureau | Updated: Jun 9 2012, 10:27am hrs
A mortgage guarantee institution, promoted by the housing finance regulator National Housing Bank (NHB), has received the Foreign Investment Promotion Boards (FIPB) approval to kick off operations, RV Verma, CMD, NHB, said on Friday.

NHB is partnering with international institutions like the Asian Development Bank (ADB) and International Finance Corporation (IFC). NHB will have a 38% stake and will be the anchor investor. The firm is being set up to compensate banks and housing finance companies (HFCs) in case of defaults by home loan borrowers.

The initial paid-up capital of the venture will be R120 crore. The proposed mortgage guarantee company would be a non-banking finance company. Verma said this was not the first time that NHB was taking a stake in a financial institution. It currently holds stakes in Central Bank Home Finance and Mahindra Rural Finance.