Mumbai: The Reserve Bank Monday relaxed ECB norms for affordable housing projects by withdrawing minimum capital requirement and lowering total experience to three years, while extending the scheme till next financial year.
"Developers or builders should have a minimum of three years' experience in undertaking residential projects as against five years prescribed earlier," an RBI notification said.
RBI also withdrew the condition of minimum paid-up capital requirement of not less than Rs 50 crore for the housing finance companies (HFCs) to avail external commercial borrowings (ECBs).
However, RBI said that the condition of the minimum net owned funds of Rs 300 (for the HFCs) for the past three financial years was unchanged.
"The aggregate limit for ECB under the low cost affordable housing scheme is extended for financial years 2013-14 and 2014-15 with a ceiling of USD 1 billion in each of the two years, subject to review thereafter," it said.
It added that the ECB availed of by developers and builders shall be swapped into rupee for the entire maturity on fully hedged basis.
RBI said that the interest rate spread charged by the National Housing Bank (NHB) may be decided by NHB taking into account cost and other relevant factors.
"NHB shall ensure that interest rate spread for HFCs for on-lending to prospective owners? of individual units under the low cost affordable housing scheme is reasonable," RBI said.
The central bank further said that the HFCs while making applications for ECB should submit a certificate from NHB stating that availment of ECB for financing prospective owners of individual unit is for low cost affordable housing.
HFCs should ensure that cost of such individual units should not exceed Rs 30 lakh and loan should not exceed Rs 25 lakh; and units financed should have maximum carpet area of 60 square metres, RBI added further.
First Published: Monday, June 24, 2013, 23:36