RBI Tweaks Risk Weights for Housing Finance Companies in India

RBI Updates Risk Weight Guidelines

Risk Weights for Undisbursed Loans Adjusted

In a significant move, the Reserve Bank of India (RBI) has revised the risk weight guidelines for Housing Finance Companies (HFCs) in India. This change provides relief to housing finance companies by adjusting the risk weights for undisbursed housing loans and other loans.

Capital Ratio Requirements

As part of the updated guidelines, RBI has mandated all HFCs to maintain a minimum capital ratio of 14% by March 31, 2021. This move aims to enhance the stability and financial resilience of HFCs.

Increased Minimum Net Owned Funds

In an effort to strengthen the financial position of HFCs, RBI has proposed to double the minimum net owned funds requirement to INR 20 crore. This measure is expected to improve the overall capital adequacy of HFCs.