Mumbai: Apex housing finance agency National Housing Bank (NHB) will set up a mortgage guarantee corporation in the form of a non-banking finance company (NBFC) within three months, S Sridhar, its chairman and managing director, said.

The company, to be set up as a joint venture with US-based United Guaranty Corporation, the International Finance Corporation and the Asian Development Bank, will provide risk guarantee to lenders against loan defaults, he said.

The joint venture, ''in the lines of the Export Credit Guarantee Corporation,'' will have an equity capital of above Rs100 crore and NHB will be its single largest shareholder, he told a banking conclave organised by Ficci in Kolkata.

NHB plans to mobilise public money beginning this year through fixed deposits and zero coupon deep discount bonds worth Rs3,000 crore, to raise around Rs11,000 crore this fiscal, he said.

Sridhar said the bank will also soon issue zero coupon bond and start accepting fixed deposits from the public to tap retail investors. ''NHB is allowed to accept term deposits with more than one-year maturity from the public,'' he said

NHB, he said, had approached the finance ministry for income tax benefits under section 80C for its proposed fixed deposits with a tenure of up to 10 years. ''We are awaiting approval from the government for the tax benefit and once we get that, we'll launch the term deposit schemes,'' he added.

''Fixed deposits of less than five years will, however, get no tax benefit,'' Sridhar said, adding that the interest rate on these deposit schemes will be in line with the market rates.

Sridhar, a member of the central government committee entrusted with the responsibility of drafting a rural housing policy, said the draft policy is almost ready and, after discussions next month, is expected to be announced in August this year.

The number of people living in slum areas in cities was increasing at a rapid pace and the maximum portion of them was coming from the villages. This has necessitated the formation of a separate rural housing policy, he said.