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Sitharaman told the Lok Sabha that the housing sector needs efficient and conducive regulation and that NHB plays a difficult and contracitory role of being both lender and regulator of the housing finance sector. "Efficient and conducive regulation of the housing sector is extremely important in our context. The National Housing Bank (NHB), besides being the refinancer and lender, is also regulator of the housing finance sector. This gives a somewhat conflicting and difficult mandate to NHB," she said."I am proposing to return the regulation authority over the housing finance sector from NHB to RBI," the minister said. Necessary proposals have been placed in the Finance Bill," she added.This step is one among other steps announced on Friday to strengthen and better regulate the NBFC sector as non-banking financial companies (NBFC) in the country are facing severe liquidity crisis. The crunch situtation came to light after the infrastructure lending major IL&FS last September defaulted on a commercial paper.Among other decisions, Sitharaman said the government will provide one-time six months' partial credit guarantee to public sector banks for first loss of up to 10 per cent."Non-Banking Financial Companies (NBFCs) are playing an extremely important role in sustaining consumption demand as well as capital formation in small and medium industrial segment," she said."NBFCs that are fundamentally sound should continue to get funding from banks and mutual funds without being unduly risk averse. For purchase of high-rated pooled assets of financially sound NBFCs, amounting to a total of Rs one lakh crore during the current financial year, the government will provide one-time six months' partial credit guarantee to public sector banks for first loss of up to 10 per cent," the minister added.( With inputs from IANS )

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Politics :Budget 2019-20: Six months' partial credit guarantee proposed for PSBs

Finance Minister Nirmala Sitharaman on Friday said the government has proposed to provide a one-time six-month partial credit guarantee to public sector banks (PSBs) for first loss of up to 10 per cent. ...

Business :RBI to regulate HFCs instead of National Housing Bank: Sitharaman

Presenting her first Union Budget, Finance Minister Nirmala Sitharaman proposed to transfer the regulatory authority over housing finance sector to the Reserve Bank of India (RBI) from the National Housing Bank (NHB). ...