RBI Grants Approval to RDCL to Revamp India's Mortgage-Backed Securitisation Market.
Economy Business
In January 2025, Mumbai (Maharashtra)-based RMBS (Residential Mortgage-Backed Securitisation) Development Company Limited (RDCL) received its Certificate of Registration (COR) from the Reserve Bank of India (RBI), marking a significant milestone for India's housing finance sector.
- The paid-up capital of RDCL is Rs. 500 crore, and it is expected to commence operations in March 2025.
- RDCL is designed to create new opportunities for long-term institutional investors, including insurance companies, pension funds (PFs), and provident funds (PFs).
- RDCL, established with the National Housing Bank (NHB) as the largest shareholder, is supported by a diverse group of investors, including banks, housing finance companies (HFCs), NBFCs, and insurance companies, with the goal of driving securitisation innovation, boosting investor confidence, supporting housing finance policies, and collaborating with key stakeholders.
Main Point :- (i) RDCL will invest in RMBS issuances, offer second-loss credit enhancements, and provide liquidity solutions to Primary Lending Institutions (PLIs) to support the housing finance sector and manage risks.
(ii) RDCL aims to standardize processes and documentation to ensure transparency and build trust among stakeholders.
(iii) The RMBS market is vital for meeting India's housing finance demand by diversifying funding sources, providing liquidity to PLIs, and offering investment opportunities, with outstanding individual housing loans growing at a CAGR of 13.1% from Rs 17.95 Lakh Crore to Rs 33.19 Lakh Crore between 2019 and 2024.
About RBI
Governor : Sanjay Malhotra
Headquarter : Mumbai
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