Developers and builders who have at least three years’ experience in implementing residential projects may avail external commercial borrowing (ECB) for low-cost affordable housing projects.
Reserve Bank of India (RBI) reduced the mandatory years of experience from the existing five years to three years in order to enable more developers to access ECB route.
Further, the central bank withdrew the condition of minimum paid-up capital of not less than Rs 50 crore for
housing finance companies (HFCs) to raise funds through ECBs.
The condition of the minimum net-owned funds of Rs 300 crore for the past three financial years remains unchanged, RBI said. The annual limit for raising ECB under the low-cost affordable housing scheme is capped at $1 billion.
This norm will be applicable to the current financial year, 2013-14 and the next year (2014-15). The ECB, availed of by developers and builders shall be swapped with rupees for the entire maturity on a fully-hedged basis.
Meanwhile, the central bank asked the housing finance regulator National Housing Bank (NHB) to fix the spread for on-lending after taking into account factors like cost.
According to norms, HFCs must provide certificate that money raised through ECB is for financing prospective owners of individual units for low-cost affordable housing.
They will ensure the cost of individual housing units does not exceed Rs 30 lakh and the loan amount does not exceed Rs 25 lakh.
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