NHB goes public with refinance list to curb misuse

Mumbai: For the first time, the National Housing Bank (NHB) has publicly disclosed the list of beneficiaries under its refinance scheme in a bid to enhance transparency and prevent the misuse of its name by lending institutions.

The decision comes after it was discovered that fraud-hit Aviom India Housing Finance had been allegedly using outdated NHB refinance sanction letters, some as old as three to four years, to secure loans from banks.

"The NHB wants to ensure that incidents like Aviom are not repeated. By making its refinance list public, it aims to prevent unscrupulous entities from misusing its name to secure loans from other financial institutions," said the CEO of a housing finance company.

The NHB has now released the names of nearly 50 housing finance companies (HFCs) that received refinance assistance in FY25.

The list includes prominent players such as LIC Housing Finance, PNB Housing Finance, Can Fin Homes, and Aadhar Housing Finance, among others.

By making this data public, the regulator aims to enable lenders and market participants to independently verify refinance claims and prevent potential misuse of NHB's credentials in raising funds.

Aviom India Housing Finance is currently under investigation by NHB for allegedly misusing refinance funds and diverting them into fraudulent mutual fund investments. The company's practices triggered regulatory concern about the broader risks of opaque refinancing disclosures in the sector.

NHB plays a critical role in the mortgage ecosystem by offering refinance facilities to HFCs against the housing loans they extend, particularly in the affordable housing segment. This refinancing enables housing finance companies to access low-cost, long-term funds, which can then be passed on to homebuyers in the form of more affordable interest rates.

Industry sources told ET that under its new leadership, NHB has also reformed the refinance disbursal process to ensure a more equitable distribution of funds across the sector.

"Earlier, a sizeable chunk of refinance was cornered by a few large HFCs. But the new NHB leadership has implemented an internal formula that ensures all notable HFCs receive access to low-cost funds based on the size and growth of their business," said the CEO at another housing finance company.

NHB's refinance assistance remains a vital source of long-term liquidity for the housing finance sector.