That is a totally silly logic.
Agreed that credit appraisal and risk management is different for affordable housing finance. But then credit appraisal and risk management is also significantly different for other asset classes – be it infra finance, auto finance, CV finance, project finance, etc. etc. Going by such logic – banks must have a separate subsidiary for each asset class….
The other question is why does NHB have to subsidize funding for HFCs…. You spin it into a positive… Unfortunately, that is not right…. The inherent riskiness of HFCs is the reason why they are provided subsidized funding by NHB… Minus the support from NHB, most HFCs would struggle to raise funds from banks…
There may be some exceptional HFCs (like Gruh)… But in general HFCs are considered highly risky….. Banks are less willing to lend to them… When banks want to do similar business as HFCs, they incorporate subsidiaries to do it…. Some banks (e.g. ICICI) are trying to sell off their HFC business…. It is a hyper-competitive area – there are already 60+ HFCs and another 60 – 80 are expected to start off in 2 years…
I am signing out of this discussion… Hope you can take this in the positive spirit… No amount of evidence can convince those who strictly don’t want to be convinced….. 
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