RBI offers Rs 10,000 crore facility to NHB, Nabard to boost affordable housing, rural lending

The Reserve Bank of India has offered a new Rs 10,000-crore facility to the National Bank for Agriculture and Rural Development (NABARD) and the National Housing Bank (NHB) to boost rural lending and affordable housing. The move announced on Thursday in a Monetary Policy Committee (MPC) press conference, is expected to ease liquidity concerns at the bottom of the pyramid, said The Economic Times report.

RBI announced the additional special liquidity facility of Rs 5,000 crore each at its policy lending rate to NABARD and the NHB. Small non-bank finance companies and micro-lenders, and housing finance companies are going to get liquidity assistance via Nabard and the NHB respectively, said the report.

The report quoted RBI governor Shaktikanta Das as saying in the statement that the facility to the NHB will shield the housing sector from any liquidity disruptions and increase the flow of finance to the sector through finance companies. He further said that the funds to Nabard will help NBFCs and microfinance institutions to obtain access to liquidity.

The Economic Times also quoted Poddar Housing & Development managing director Rohit Poddar as saying that the additional liquidity facility to the NHB "will provide much-required cushioning for the housing finance companies to lower home loan interest rates.”

India chief executive of French food services company Elior had a view that the credit flow to Nabard will give a push to the rural economic activity as per the report.

Earlier in April, Nabard got a refinance support of Rs 35,000 crore while NHB got Rs 10,000 crore, the report said.