The National Housing Bank (NHB) has increased the refinance limit to Rs 30,000 crore for housing finance companies for 2018-19 in view of the current liquidity position of the sector, according to an official release.
The National Housing Bank (NHB) has increased the refinance limit to Rs 30,000 crore for housing finance companies for 2018-19 in view of the current liquidity position of the sector, according to an official release. The housing finance regulator had originally set the refinance target at Rs 24,000 crore for 2018-19 beginning July this year. The move will help alleviate the liquidity crunch that the sector is facing following series of defaults by group companies of IL&FS Ltd.
Shares of most of the housing finance firms, including DHFL, have been hammered on bourses in the past few weeks due to liquidity concerns triggered by debt defaults by IL&FS. “Now, eligible Housing Finance Companies & Other entities will have increased availability of funds”, the Finance Ministry said in the release. This refinancing is a credit flow to Housing Finance Companies & other Institutions, it said. As a regulator, it said, the NHB regularly monitors the liquidity position of housing finance companies.
The statement further said that till date, Rs 8,835 crore has been sanctioned. The NHB is the Principal Agency to promote Housing Finance Institutions, currently 97 in number, and to provide financial support to eligible institutions. Stock of housing finance firms DHFL closed 18.52 per cent down at Rs 223.50 on BSE.
Among others, Edelweiss Financial Services closed down by 13.67 per cent, Shriram City Union Finance 6.82 per cent, Cholamandalam Investment and Finance Company 6.07 per cent, Muthoot Capital Services 4.48 per cent and Motilal Oswal Financial Services 2.48 per cent. However, Indiabulls Housing Finance was up by 3.26 per cent at Rs 939.85 apiece at close Monday.