National Housing Bank (NHB) on Saturday said it expects to provide Rs 9,000 crore refinance assistance to institutions providing home loan in the next six months to meet its annual target of Rs 17,000 crore by June next year.
“Our budget is to give loans (refinance assistance) of Rs 17,000 crore from July to June period. We are confident that we will be able to meet our target,” NHB Chairman and Managing Director R.V. Verma said on the sidelines of National Real Estate Development Council (Naredco) convention in New Delhi.
So far the company has provided refinance assistance of about Rs 8,000 crore, he added. Out of this entire target, about 90 per cent lending will be for houses priced below Rs 25 lakh, he added.
He said NHB usually provides loans to housing finance companies to be used for refinancing of individuals home loans and promote affordable housing.
“We offer the loans at different rates and our average interest rate is around 9.25 per cent,” Verma said. On rural housing, he said: “We offer special concessions for rural and low-income house group. For the low-income group (LIG) houses priced up to Rs 5 lakh, the interest rate is 8.5 per cent. We also offer fixed interest rate on LIG for 15 years,” he said.
For rural housing the interest rate is 50 basis points lower than the standard rate. So if the average rate is 9.25 per cent, for the rural area it will be 8.75 per cent.
Asked about the RBI’s interest rate policy, he said: “It is very difficult to say where the interest rate will move in the current scenario. Now, growth is taking a front seat and RBI is recognising that. However, inflation is also very important.”
He further said the current inflation is a cost-push phenomenon rather than a demand-push one.
“Growth may be turning in the near future and it may turn around the supply-side scenario. So I think from RBI, there may be a good balance between the two while announcing any further decisions on interest rate change,” Mr. Verma added.