RBI policy a positive surprise for housing finance cos; expect rate cuts

Financial

Financial News :

While the Reserve Bank of India (RBI) kept policy rates unchanged in the second bi-monthly policy of this financial year, a key positive was reduction in risk weights assigned to home loans lent on or after June 7. Risk weights help banks and non-banking financial companies (NBFCs) to assess the risk associated with different loan segments and provide for them accordingly. Acknowledging that delinquencies have been rather low in the home loans segment, the RBI reduced risk weights for home loans. Risk weights on home loans above Rs 75 lakh has been reduced from 50 per cent to 35 per cent. Analysts expect some rate cuts from the National Housing Board, which lends to housing finance companies (HFCs).

This, in turn, will lead to further rate cuts in this segment.

Suresh Ganapathy, banking analyst at Macquarie Capital, says, “Reduction in risk weights on home loans is a positive. We estimate rates could reduce anywhere between 15 and 50 basis points (bps) across various home loan products. We continue to be positive on HFCs, which will grow well due to the regulatory support.”

Financial News, Latest Financial News, Finance News India, Financial News Today, Current Financial News

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s