While the RBI disappointed the market, in general, by keeping its policy rate unchanged, housing finance companies (HFCs) had much to cheer about. The central bank lowered risk-weights in certain buckets and reduced the standard provisioning requirement from 0.4 per cent to 0.25 per cent for individual housing loans.
The reduction in risk-weights are for loans in the ₹30- 75 lakh and above ₹75 lakh categories. This will release capital and nudge players, even banks, to lend more to the housing segment.
Also, savings on the capital front due to lower risk-weights and reduction in standard provisioning can mean lower lending rates. The reduction in risk-weights will particularly benefit players with larger loan ticket size such as PNB Housing Finance. As on March 2017, PNB Housing Finance had an average loan ticket size of ₹31.5 lakh, higher than the ₹20-25 lakh that HDFC and LIC Housing Finance report. The PNB Housing Finance stock rallied nearly 9 per cent after the RBI’s policy.
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