RBI GIVES NOD TO ECB ROUTE FOR AFFORDABLE HOUSE PROJECTS

The Reserve Bank of India (RBI) has allowed developers of affordable housing projects and finance companies that provide funding to raise funds through External Commercial Borrowings (ECBs) via approval route. The Reserve Bank of India (RBI) has said that the funds raised so must not be used for the acquisition of land. The Reserve Bank of India (RBI) has also defined affordable housing project as a project, which has 60% of permissible floor- space-index (FSI) for units having maximum carpet area of up to 60 square meters. A developer wishing to raise funds through Forex
loans must have a proven track record, five years experience in undertaking residential projects and must have not defaulted in any of the previous financial commitments. Further, the project must be free from any litigation. Housing Finance Companies (HFCs) with a minimum paid-up capital of Rs 50 crore, net owned funds of at least Rs 300 crore for last three years are eligible to borrow through ECBs.