Page 16 - Banking Finance May 2019 N

HOUSING

HOUSING

NEWS
NEWS
NEWS
NEWS
NEWS

RBI to set up panel on development of housing finance Bajaj Housing Finance
securitisation market Limited offers the fastest
The Reserve Bank of India, has said that it will soon set up a committee to as- loan against property
sess the state of housing finance securitisation market in
the country. The move is aimed at bringing in Bajaj Housing Finance Limited is of-
standardisation of asset securitisation practices to enable fering loans
better management of credit and liquidity risks. against the
property, to
The committee, which will be announced soon, will also
study the best international practices, and lessons learnt from the global finan- self-em-
cial crisis. It will propose measures to further develop these markets in India by ployed and
identifying critical steps required, such as definition of conforming mortgages, salaried
mortgage documentation standards, digital registry for ease of due diligence professionals to address their high-
and verification by investors, and avenues for trading in securitised assets. value needs with a high loan amount
of Rs. 3.5 crore and quick disbursal.
"The composition and terms of reference of the committee will be announced This is a secured loan in which you
shortly. The report will be due by the end of August," the RBI said, as part of its
can mortgage your property and bor-
Statement on Developmental and Regulatory Policies, released along with the row against it. Offering disbursal to
first bi-monthly Monetary Policy Statement of 2019-20.
your bank account in just 4 days,
The move comes at a time when housing finance companies and NBFCs have Bajaj Housing Finance Limited loan
been facing higher borrowing costs and slowdown in funding after a liquidity against property is said to be the
squeeze in the market. The RBI noted that globally, residential and commercial fastest one in the country.
mortgages are supported by well-lubricated securitisation markets, under which A loan against property is usually
mortgage originators package portfolios of mortgages and resell them in capi-
taken to fund big tickets expenses.
tal markets as mortgage-backed securities or covered bonds.
Usually, it can be used for any pur-
poses, such as overseas education,
PNB Housing Finance to mop up $1 billion from foreign wedding, medical emergencies and
markets consolidate debt.

PNB Housing Finance said it will raise up to $1 billion (around Rs 6,954 crore) from With the flexi hybrid feature, bor-
foreign markets, and additional Rs 10,000 crore by issuing bonds. The board will rower can withdraw money from
consider approval of "fund raising by way of external commercial borrowings up total sanction in parts, as and when
to $1 billion in one or more tranches", PNB Housing Finance said in a regulatory the need arises, and pays interest
filing. The board will also consider the issuance of secured and unsecured non- only on the amount you use.
convertible debentures aggregating up to Rs 10,000 crore in tranches, it said.

16 | 2019 | MAY | BANKING FINANCE