The National Housing Bank's direction to housing finance companies to desist from providing loans under subvention scheme will lead to increase in interest cost for homebuyers and aggravate the liquidity crunch faced by real estate developers, according to two apex bodies of the realty industry. 

Worried over frauds by builders, the National Housing Bank (NHB) has asked housing finance companies (HFCs) to "desist" from offering loans under interest subvention scheme wherein real estate developers pay pre-EMIs (equated monthly instalments) on behalf of homebuyers for a certain period. 

The direction has been issued by the NHB in view of several complaints of frauds allegedly committed by certain builders using subvention schemes.

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