Liquidity Infusion of ₹ 10,000 Crore to be Provided to HFCs

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With an aim to boost lending and accelerate growth, the housing sector regulator (National Housing Bank) has opened a liquidity infusion facility of ₹ 10000 crore for Housing Finance Companies (HFCs) . This is expected to improve liquidity in sector.

This would also enable companies to provide individual loans for affordable housing.

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  • The Union Finance Minister along with the heads of all public sector banks takes into consideration of the important moves reacted to liquidity infusion. Review issues linked to credit growth against the backdrop of a slowdown in several sectors is also one of the major concerns.
  • The various key sectors constitute medium and small industries (MSME) , retail, automobiles, affordable housing, non-banking finance companies (NBFC) and housing finance companies (HFCs) to boost growth.
  • Apart from easing fund flow to housing sector this measure would also serve as an additional liquidity for individual housing loans in affordable segment.

National Housing Bank (NHB)

  • It was established in 1988 as an apex agency, under National Housing Bank Act, 1987 being categorized as an All India Financial Institution (AIFI) .
  • It operates as a principal agency to promote housing finance institutions both at local as well as regional levels. financial and other support incidental to such institutions and for matters connected therewith.

Housing Finance Companies (HFCs)

  • A Housing Finance Company is a company registered under the Companies Act, 1956 (1 of 1956) .
  • HFCs are responsible for transactions related to principal objects, the transacting of the business of providing finance for housing, whether directly or indirectly. For eg PNB Housing Finance Limited, IDBI Homefinance Limited (IHFL) , ICICI Home Finance Company Limited
  • The Housing Development Finance Corporation (HDFC) is one of the prominent housing lenders in India.

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