Revised Risk Weight Guidelines for Housing Finance Companies.
12 August 2024
The Reserve Bank of India has updated the guidelines for Housing Finance Companies (HFCs) as outlined in the Master Direction dated February 17, 2021. The key changes are:
1. Risk Weights for Undisbursed Loans: To correct discrepancies in risk weight calculations, the risk weight for undisbursed housing or other loans will be capped at the level applied to an equivalent disbursed loan amount.
2. Risk Weight for Commercial Real Estate – Residential Building: For standard exposures to commercial real estate used for residential buildings, the risk weight is set at 75%. Exposures not classified as standard will carry a risk weight of 100%, as per the guidelines for 'Other Assets'.
These changes are effective immediately, with all other existing instructions in the Master Direction remaining unchanged.