RBI Forwards a Question Bank to Banks

March 29, 2007	(1 votes, average: 5 out of 5)  Loading ...
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The Reserve Bank of India (RBI) seems to take a strict attitude towards banks related to the real estate and home loan portfolio. It has given the banks a list of 32 questions including information on whether they expect any correction in real estate prices.

The banks will also require showing the procedure of how they evaluate property, the market sources they trust to calculate the actual property, and the documents that are obtained from customers while issuing loans. The authority has also asked the banks to supply adequate information on the relationship of loan to property value.

It is like a questionnaire for the Banks who also tell the RBI whether they expect property prices and the home loan demand to come down in near future and the kind of risk factors associated in lending to the Indian real estate market. Banks need to present their stand on whether they are conducting any stress test on its real estate and home loan portfolio; whether they have any reset period on fixed rate loan and the kind of benchmark strategy they use to reset interest rate incorporated in the loan scheme.

RBI is believed to have set up an internal committee to understand the trend on the real estate and home loan segment. The garnered data will help the committee to follow the historic development in this segment. RBI seems to be highly concerned about this portfolio as real estate prices in India continue to go through the roof as there is no tomorrow.

News Published Under:   Banking and Finance, Home Loans |

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