National Housing Bank to execute Rs 200 cr securitisation transaction soon

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The Budget proposal to exempt securitisation trusts from income tax has got a green signal from the National Housing Bank Chairman and Managing Director RV Verma who said that the bank would be coming out with a Rs 200 crore transaction in a month.

Verma said, "Taxation was a big impediment to the securitisation process and the announcement will surely help in increasing the volumes."

He said the NHB has identified pools of Dewan Housing Finance and Sundaram Home Finance collectively of Rs 200 crore which will be securitised and said it will be securitised in a month.

"The route is very good as it helps create liquidity for the lenders and we are sure that there is a market for this," Verma said.

Earlier in his Budget 2013-14 speech, Finance Minister had said, "To facilitate financial institutions to securitise their assets through a special purpose vehicle, I propose to exempt the Securitisation Trust from income tax. Tax shall be levied only at the time of distribution of income by the Securitisation Trust at the rate of 30 percent in the case of companies and at the rate of 25 percent in the case of an individual or HUF."

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Story first published: Tuesday, March 5, 2013, 13:30 [IST]
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