Liquidity Infusion Facility Scheme

Aug 20, 2019 | by Avantis RegTech Legal Research Team

Industry Specific Compliance

The National Housing Bank (NHB) on August 02, 2019, has launched a new Scheme called Liquidity Infusion Facility (LIFt) Scheme to support Housing Finance Companies (HFCs) in creating individual housing loan portfolio that falls under the priority sector, as defined by Reserve Bank of India (RBI). The liquidity infusion by NHB may create confidence of the market in HFCs and thus they will be able to raise more resources from other sources like the Banks or the debt market.

Eligibility and application: All HFCs registered with National Housing Bank having a minimum internal rating of “B”. The HFCs desirous of availing this facility may submit their applications to the General Manager, Refinance Operation Department, National Housing Bank, New Delhi.

Objective: To create individual Housing Loans portfolio of the HFCs within the next three months. HFCs will be utilising the facility for financing individual housing loans only, up to the individual loan size which fall under the Priority Sector as defined by RBI. In case, the amount drawn under the scheme is not utilised till the end of three months, the amount to the extent which is not utilized or disbursed, then has to be refunded.

The maximum period of loan will be 60 months from the date of drawdown, but not exceeding the underlying portfolio. At the time of availing this facility, HFC will provide first exclusive charge on the individual Housing Loan portfolio with a minimum margin of 15% i.e. asset cover will be 115%. The duration of the Scheme is upto June 30, 2020.


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