‘Talk­ing to Govt about Cut­ting Stamp Duty, Reg­is­tra­tion Cost’

The Economic Times - - Money -

Na­tional Hous­ing Bank, the reg­u­la­tor for hous­ing fi­nance com­pa­nies, is plan­ning a slew of mea­sures aimed at trans­form­ing the hous­ing sec­tor, said Sri­ram Kalaya­nara­man, MD & CEO. In an in­ter­view to Saikat Das and Baiju Kalesh, he said the reg­u­la­tor wants to set a gold stan­dard for hous­ing prices while it wants mem­ber com­pa­nies to ex­tend more credit in hous­ing sec­tor rather than on non­hous­ing ones such as loans against prop­erty, builders’ loans, etc. Edited ex­cerpts:

What goals have you set for your­self? Our goal is to create a one-stop shop on hous­ing and hous­ing fi­nance re­lated is­sues for all stake hold­ers in­clud­ing the gov­ern­ment, reg­u­la­tors and cus­tomers. NHB should be the in­sti­tu­tion for pro­vid­ing so­lu­tions by adding and en­hanc­ing its knowl­edge cap­i­tal.

How do you plan to trans­form the sec­tor? We may be able to bring about a mean­ing­ful trans­for­ma­tion in the hous­ing sec­tor, es­pe­cially in ar­eas such as af­ford­able hous­ing, cus­tomer’s choice and ac­ces­si­bil­ity to fi­nance, bet­ter trans­parency and dis­clo­sures be­sides griev­ance re­dres­sal mech­a­nism.

On the is­sue of over­all house ac­qui­si­tion cost, it is ob­served that the stamp duty and reg­is­tra­tion charges vary across states and could be as high 12-13%. It can be mod­er­ated to ap­ply more or less uni­formly across ge­ogra­phies. We are al­ready dis­cussing with the cen­tral and state gov­ern­ments on re­duc­tion in stamp duty and reg­is­tra­tion charges. For this pur­pose, NHB has also com­mis­sioned a study with IIM-Ban­ga­lore.

Re­gard­ing the im­ple­men­ta­tion of speed­ier griev­ance re­dres­sal mech­a­nism for hous­ing fi­nance, we are toy­ing with the idea of cre­at­ing an om­buds­man for hous­ing fi­nance com­pa­nies. We are also aim­ing to be­come the knowl­edge de­pos­i­tory for the hous­ing sec­tor. We are also in the process of re­vamp­ing our hous­ing price in­dex with land and build­ing ma­te­ri­als price indices un­der NHB RESIDEX brand, mak­ing it more aligned to the re­quire­ments of the sec­tor.

Our dream is to make it a gold stan­dard for hous­ing prices in the coun­try. We are also try­ing to create an early warn­ing sys­tem, which could be a big help for hous­ing fi­nance com­pa­nies to de­tect stress in the sys­tem. How about the delin­quen­cies now in the hous­ing sec­tor? As of now, over­all delin­quency in hous­ing loans is less than 1.5 %, so the sec­tor is much bet­ter off than the other seg­ments of the econ­omy. Our pro­posed por­tal will help in rais­ing the trig­gers in the event of stress in the sys­tem in or­der to sen­si­tise the stake­hold­ers.

How do you pro­pose to ease the process of ap­ply­ing for HFC li­cence? A num­ber of steps have been taken to make the ap­proval process for new HFCs more trans­par­ent. The ap­pli­cants’ names are dis­played on our web­site. Once they sub­mit the re­quired doc­u­ments and we re­ceive clear­ances from the reg­u­la­tors, we try to com­plete our in­ter­nal process in the short­est pos­si­ble time so that ap­provals can be ex­pe­dited. On an av­er­age, one can ex­pect the go-ahead any­where be­tween 90 and 120 days.

Are there suf­fi­cient num­ber of HFCs in In­dia? As on date, 82 hous­ing com­pa­nies are reg­is­tered with NHB. Large cor­po­rates are show­ing in­ter­est in the sec­tor and this num­ber is likely to in­crease. The mar­ket in our coun­try is huge and so is the num­ber of HFCs. Con­sol­i­da­tion, too, may hap­pen just like in any other in­dus­try – it will hap­pen in due course.

Are you wor­ried that some HFCs are not fund­ing ad­e­quately to the hous­ing sec­tor? I would like to see the HFCs con­cen­trate more on hous­ing loans rather than non-hous­ing loans. There are hous­ing fi­nance com­pa­nies whose books show that 40-45% of their loans are in LAP, builder fi­nanc­ing, etc. Per­son­ally, I would like to get that ra­tio to 70:30, mean­ing 70% loans into hous­ing fi­nance. Core fi­nanc­ing to in­di­vid­u­als should get the im­por­tance.

Any there any over­seas fund rais­ing plans? NHB has raised funds from a num­ber of mul­ti­lat­eral in­sti­tu­tions for spe­cific ar­eas such as af­ford­able hous­ing, green hous­ing and other emerg­ing ar­eas of in­ter­est, and we are plan­ning to raise about $200 mil­lion, for which we are in dis­cus­sions with a cou­ple of mul­ti­lat­eral in­sti­tu­tions.

What are the chal­lenges you face? NHB has al­ways been a lean or­gan­i­sa­tion, and we pride our­selves for our cross-dis­ci­plinary ex­per­tise. So, we are look­ing at how to bet­ter op­ti­mise our tal­ent pool to achieve the max­i­mum re­sults. Fur­ther, the chal­lenge is how to bring more tal­ented young peo­ple in NHB. We have re­cently re­cruited some spe­cialised data an­a­lyt­ics peo­ple who would help us to build the an­a­lyt­ics hub. We will con­tinue to see how to tap the best tal­ent.

The chal­lenge is how do we raise low-cost funds, in­clud­ing cap­i­tal. We are man­dated to work on thin mar­gins in or­der to ben­e­fit con­sumers. Cur­rently, HFCs raise about 4-5% of their re­quired funds from NHB. We are look­ing into how to in­crease the funds flow, par­tic­u­larly to those HFCs, which are cater­ing to the eco­nom­i­cally weaker sec­tions.

We will also work on how to make smaller hous­ing fi­nance com­pa­nies ac­cess the bond mar­ket. One way could be to im­prove the credit rat­ing of HFCs’ bond is­sues through credit en­hance­ments.

What’s the lat­est on ‘hous­ing for all’? NHB as a cen­tral nodal agency signed up MOUs with 154 pri­mary lend­ing in­sti­tu­tions for the im­ple­men­ta­tion of Prad­han Mantri Awas Yo­jana - Credit-Linked Sub­sidy Scheme, and dis­bursed a sub­sidy of about ₹ 377 crore to roughly 21,000 house­holds un­der the com­po­nent. Go­ing for­ward, NHB is geared to im­ple­ment the scheme for mid­dle in­come group house­holds and ru­ral hous­ing, as an­nounced by the Prime Min­is­ter re­cently.

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