What changed
RBI expanded ECB end-use to include low cost affordable housing projects, moving from earlier restrictions. Developers, HFCs, and NHB can now raise ECB for such projects under approval route. Detailed eligibility criteria were set for borrowers and projects.
What it means for you
Banks and lenders can now facilitate ECB for affordable housing, opening a new funding channel. HFCs must meet strict capital and NPA norms to access this route. Developers need proven track record and clearances, reducing default risk for lenders.
What you must do
- Verify developer eligibility: minimum 5 years experience in residential projects, no defaults, clearances in place.
- Check HFC compliance: minimum paid-up capital INR 50 crore as per latest audited balance sheet, minimum NOF for past three financial years not less than INR 300 crore, NNPA not exceeding 2.5% of net advances.
- Ensure project meets at least 60% of permissible FSI for units with maximum carpet area up to 60 sqm.
- Confirm ECB is swapped into Rupees for entire maturity on fully hedged basis for HFCs.
- Route applications through approval process for ECB under this scheme.
Who it affects
Category-I Authorised Dealer Banks, Developers and builders of affordable housing, Housing Finance Companies (HFCs), National Housing Bank (NHB), Prospective home buyers in low cost housing
What is the minimum carpet area requirement for units in an eligible project?
At least 60% of permissible FSI must be for units with maximum carpet area up to 60 square meters.
Can slum rehabilitation projects avail ECB under this circular?
Yes, slum rehabilitation projects are eligible, with parameters set by the Central Sanctioning and Monitoring Committee of the Affordable Housing in Partnership Scheme.
What is the maximum loan amount per individual buyer for HFCs financing under ECB?
The maximum loan sanctioned to an individual buyer is capped at INR 25 lakh, subject to the condition that the cost of the individual housing unit shall not exceed INR 30 lakh.