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Mortgage norms: Tightened or relaxed?

From 50 per cent, a home finance firm's exposure to retail loans will go down to 37.5 per cent. Instead of a floor for retail loans, should the RBI look for a ceiling for wholesale loans?

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Solicitor General Tushar Mehta, appearing for the Centre, said he had sought a meeting with the RBI. The Bench said if the RBI reply ‘goes much beyond the query posed by us, there will be a lot of opinions on it’

Tamal Bandyopadhyay New Delhi
After taking over as the regulator of the mortgage market in August 2019, India’s central bank last week proposed to define what is home finance and change the rules for the business.

The provocation for this is the crisis that a few large housing finance companies (HFCs) faced in the recent past. Like many other non-banking financial companies (NBFCs), they borrowed short-term cheap money from the market to lend long and faced the music when the interest rate cycle changed in 2018.

The compounded annual growth rate of NBFCs in the five years between 2013 and 2018 was 17 per cent versus
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First Published: Jun 21 2020 | 9:10 PM IST

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