RBI permits $1bn ECBs to encourage low cost housing

RBI permits $1bn ECBs to encourage low cost housing
Real estate developers and housing finance companies have been allowed by Reserve Bank of India (RBI) to raise up to USD1 billion through external commercial borrowings (ECBs) in the current fiscal to promote low-cost housing projects.

In a statement, RBI said, "It has been decided to allow ECB for low-cost affordable housing projects as a permissible end-use, under the approval route. ECB can be availed of by developers/builders."

Other than developers, RBI said, housing finance companies (HFCs)/National Housing Bank (NHB), slum rehabilitation projects can also raise ECBs for financing prospective owners of low cost, affordable housing units.

With regard to HFCs, the statement said that only those companies with a minimum paid up capital of Rs 50 crore and minimum net owned fund of Rs 300 crore would be eligible to raise ECBs.

It further said the maximum loan amount for individual buyers should be capped at Rs 25 lakh subject to the condition that the cost of the individual housing unit would not Rs 30 lakh.

Read more about: rbi
Story first published: Tuesday, December 18, 2012, 9:30 [IST]
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