RDCL to Boost Residential Mortgage Financing, Offering Investment Opportunities to Institutional Investors
Posted On: 27 JAN 2025, 8:18 PM | By PIB Delhi
The recently established RMBS Development Company Limited (RDCL) has achieved a significant milestone by obtaining its Certificate of Registration (CoR) from the Reserve Bank of India (RBI) on January 23, 2025, paving the way for its operational launch in March 2025.
National Housing Bank (NHB), a statutory body under the Government of India, spearheads RDCL as its single largest shareholder. The initiative is further backed by a diverse set of institutional investors, including Banks, Housing Finance Companies (HFCs), Non-Banking Financial Companies (NBFCs), and Insurance firms.
Catalyst for Residential Mortgage Financing
RDCL is poised to play a pivotal role in advancing the Residential Mortgage-Backed Securitisation (RMBS) market in India. Acting as a commercially viable market intermediary, RDCL aims to:
– Provide investment avenues for long-term institutional investors such as Insurance Companies, Pension Funds, and Provident Funds.
– Enhance confidence in the RMBS ecosystem with a diverse investor base and experienced stakeholders.
– Facilitate second-loss credit enhancements, support liquidity, and standardize processes and documentation for seamless RMBS operations.
Rising Demand for Housing Loans
The growth in housing loans over the past five years underscores the need for a robust RMBS framework. Outstanding individual housing loans increased from ₹17.95 lakh crore as of March 31, 2019, to ₹33.19 lakh crore by March 31, 2024, achieving a Compound Annual Growth Rate (CAGR) of 13.1%. This upward trajectory in housing demand aligns with RDCL’s vision to complement traditional funding sources for Primary Lending Institutions.
Company Infrastructure and Vision
RDCL is headquartered in Mumbai with a paid-up capital of ₹500 crore. The Company’s establishment is expected to:
– Strengthen the housing finance ecosystem.
– Offer sustainable financing solutions for the growing residential mortgage sector.
RDCL’s operationalization marks a crucial step in addressing the increasing demand for housing finance and nurturing a thriving RMBS market.