National Housing Bank has indicated that it would like to aid in refinancing the non banking financial companies (NBFCs) which provide home loans to borrowers.

Till now, NHB had restrained its refinancing function only to those housing finance entities which were registered with it. The bank wants to widen the scope of its business so as to the housing sector of the country with target on rural and semi urban areas. NBFCs have greater presence in these areas.

The bank has applied for approval from RBI in this regard.

"Our proposal is consistent with NHB's charter," its new chairman and managing director RV Verma said.

"We are exploring the possibilities to finance all intermediary lending institutions to augment the flow of funds to the housing market," Mr Verma said.

"MFIs, like us, will be immensely benefited if NHB provides refinance support," Bandhan chairman and managing director Chandra Shekhar Ghosh said. Bandhan Financial Services plans to enter into housing finance business soon.

"The move will help NBFCs diversify their source of funds too," Mr Verma said.