MUMBAI: India would transfer the supervisory powers on its
housing finance companies to Mint Street from
National Housing Bank (NHB), ending the regulatory arbitrage that local mortgage lenders have been enjoying to date.
“NHB, besides being the refinancer and lender, is also regulator of the housing finance sector. This gives a somewhat conflicting and difficult mandate to NHB. I am proposing to return the regulation authority over the housing finance sector from NHB to the
RBI,” finance minister
Nirmala Sitharaman said. The move is aimed at improving supervision of housing finance companies.
“There are three kinds of lenders — NBFCs, banks and HFCs. NBFCs and banks were already being regulated by the RBI. Anyway, NHB used to follow the RBI in issuing regulations. This move will bring HFCs also under the central bank and make implementation of regulations simpler,” said Karthik Srinivasan, group head, financial sector ratings, ICRA.