National Housing Bank (NHB) is eager to begin its joint venture mortgage guarantee company by June 30 this year.

The mortgage guarantee company will provide guarantee to primary lending institutions like banks and housing finance companies. Also, the home loans will be backed by guarantees that might help retail customers get better loans to value offer and at lower rates due to lower risk perception.

Other partners in the joint venture are US-based Genworth Financial International Holdings, Asian Development Bank (ADB) and International Finance Corporation (IFC).

Having completed the necessary documentation, NHB will shortly move the foreign investment promotion board (FIPB) and Reserve Bank of India (RBI) for final approvals.

“Once the process of filing before FIPB is complete, we expect the approval in 15-20 days time. After that, approval from RBI and registration process might take somewhere around 30-60 days. But we definitely want to start our operations by end of June 2012,” said RV Verma, CMD of National Housing Bank.

With 38 per cent stake, NHB will be majority stakeholder of the proposed India Mortgage Guarantee Company, while Genworth Financial International Holdings would have 36 per cent, ADB and IFC will hold 13 per cent each.

Banks and non-banking finance companies (NBFCs) have already been informed about the mortgage guarantee company. “As RBI has already indicated rate cuts in the next financial year, we expect housing loans to increase and the mortgage guarantee company can play an instrumental role. By end of this financial year, new housing loans are expected to grow at 19 per cent and that might reach 24-25 per cent in 2012-13,” added Verma.