The National Housing Bank of India has established a working group to look at covered bonds, an official at the institution told The Covered Bond Report, as it explores new ways of supporting lending in the country.

Reserve Bank of India

NHB, which is a subsidiary of the Reserve Bank of India and is the country’s housing regulator, is examining the potential for covered bonds in India while at the same time working to establish a mortgage guarantee entity.

According to a report in The Hindu Business Line, NHB is finalising the mortgage guarantee project in time for launch next March. It is working with a US mortgage insurance company alongside the Asian Development Bank and International Finance Corporation.

The report also mentioned the covered bond working group and an official at NHB confirmed to The Covered Bond Report that the institution is considering the funding instrument. NHB is understood to have undertaken a study of covered bond legislation and markets in Europe and North America.

NHB regulates housing finance in India and also supports lending. Among measures it has worked on to support housing loans are direct lending to companies, partial guarantees for housing finance company bond issues, and securitisation.