in a move to channelise more resources to the housing finance sector and ease the pressure on home loan interest rates the national housing bank nhb is working on a proposal to buy housing loans from banks and housing finance companies the nhb will securitise the loan portfolios and sell the papers to institutional investors like banks and insurance companies the move will provide liquidity and free up capital to home loan lenders in this arrangement nhb will buy out standard assets and loans not exceeding rs 30 lakhs which carry low risk weightagewe are exploring this opportunity of securitisation but need to develop a road map and get approvals in place says nhb executive director r v verma the benefits of securitisation will flow to all participants be it lenders or borrowers he adds the nhb it is proposed will hold the purchased assets in its balance sheet for onward securitisation in the process the portfolios will get more seasoned it will act as a warehouse of mortgage assets to be securitised and then sold to investorsit is a great beginning and a good step to be encouraged but will take some time to fall in place observes harsh roongta ceo apna loan it will help add liquidity to the home loan market and bring a sobering effect to the interest rates the move will particularly help the smaller home loan players allowing them access to funds and more liquidity which will in turn help them serve more customersram yadav head finance and strategy orbit corporation says the nhbs move will help small ticket borrowers many of whom are perceived as risky by home loan players this move will act as a booster it will help developers create a good supply of affordable housing in the distant suburbs and be useful especially when the government is planning for housing in the range of rs 48 lakhs smaller banks can leverage this opportunity by selling existing portfolios and creating new portfolios this will ease the pressure of the rising interest rate across the sector which has been above 11 percent with the nhb looking at taking on papers below rs 30 lakhs banks can come out with standardised mortgage process which will reduce the risk on their portfolios lowcost housing of rs 45 lakhs is a reality in tier ii and tier iii cities and securitisation will help in developing the market for such loans with more liquiditythe total quantum of funds that is pumped into this instrument will determine how it works or the impact it will have on the market point out analysts nhbs rate for purchasing these portfolios should be attractive for banks which would depend on the liquidity requirements of the institution along with making commercial sense also say experts if the nhb is talking about one or two percent of the total loan disbursements it is not likely to bring any change in the system according to milan kothary md gva intercapitalis