Shares of housing finance companies edge higher

Shares of six housing finance firms rose by 0.45% to 5.70% at 12:07 IST on BSE after the central bank announced rationalization of risk weights and Loan to Value ratio on individual housing loans of commercial banks.

GIC Housing Finance (up 5.70%), Dewan Housing Finance Corporation (up 3.02%), Can Fin Homes (up 2.88%), LIC Housing Finance (up 2.15%), GRUH Finance (up 0.95%) and HDFC (up 0.45%), edged higher. Indiabulls Housing Finance was down 1.19%.

The S&P BSE Sensex was up 222.57 points, or 0.83% at 27,068.38.

Shares of housing finance companies edged higher as the National Housing Bank (NHB) which regulates housing finance companies is expected to follow suit after the Reserve Bank of India yesterday, 8 October 2015, announced rationalization of risk weights and Loan to Value (LTV) ratio on individual housing loans of commercial banks.

After the modifications announced by RBI, the lowest risk weight on individual housing loans of commercial banks has been reduced to 35% from 50% earlier. The modifications are aimed at improving the affordability of low cost housing for economically weaker sections and low income groups and giving a fillip to the government's 'Housing for All' scheme.

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