RBI Constitutes Committee on development of Housing Finance Securitisation Market

Reserve Bank of India Constitutes Committee on the Development of Housing Finance Securitisation Market

Reserve Bank of India, with a view to review the existing state of mortgage securitisation in India and various issues constraining market development, and to develop the market further, the Reserve Bank of India has constituted a Committee on the Development of Housing Finance Securitisation Market. The composition of the Committee is as under:

1 Dr. Harsh Vardhan,
Senior Advisor, Bain & Co.
Chairperson
2 Shri Chandan Sinha,
Addl. Director (Learning & Admin), CAFRAL
Member
3 Shri Sanjaya Gupta
Managing Director, PNB Housing Finance Limited
Member
4 Shri Naresh Thakkar
Managing Director & Group CEO, ICRA
Member
5 Ms. Pranjul Bhandari
Chief India Economist, HSBC
Member
6 Ms. Bindu Ananth
Chair & Trustee, Dvara Trust
Member

The Terms of Reference of the Committee are given below:

  1. To review the existing state of mortgage backed securitisation in India, including the regulations currently in place, and to make specific recommendations on suitably aligning the same with international norms;

  2. To analyse the prevalent structures for mortgage backed securitisation transactions in India, including legal, tax, valuation and accounting related issues, and suggest necessary modifications to address the requirements of both originators as well as investors;

  3. To identify the critical steps required for standardisation of mortgage backed securitisation practices such as, conforming mortgages, mortgage documentation standards, digital registry for ease of due diligence and verification by investors;

  4. To assess the role of various counterparties, including the servicers, trustees, rating agencies, etc. in the securitisation process and suggest measures required, if any to address the key risks, viz., structural, fiduciary and servicer risks;

  5. To recommend specific measures for facilitating secondary market trading in mortgage securitisation instruments, such as broadening investor base, and strengthening market infrastructure;

  6. To analyse the inter-linkages between securitisation and other related financial market segments/instruments and recommend necessary policy interventions to leverage these inter-linkages; and,
  7. To identify any other issue germane to the subject matter and make recommendations thereon.

The Committee shall submit its report by the end of August 2019.

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