The National Housing Bank (NHB), the regulatory body for housing finance companies, is gearing up to strengthen India?s housing loan market. According to S Sridhar, CMD ? NHB, the regulator along with other top 10 banks, isworking to set up an uniform electronic registry system through a special purpose vehicle (SPV) for mortgage property information. This is in conformity with the last Union Budget proposal. It has further prepared a report on the standards of valuations to bring in uniformity in property prices.
Said Sridhar, ?We are also working to finalise standards of valuations of residential projects, which will be shortly approved by the Indian Banks? Association (IBA) committee and then made applicable to all mortgage lenders. NHB will ensure compliance of housing finance companies while IBA will garner consensus amongst banks.?
Sridhar, who is also the CMD of Central Bank of India, pitched for developing a secondary market for housing loans. With a housing loan portfolio of Rs 6,000 crore, the Central Bank of India would like to buy mortgage loans from the secondary market, he said.
According to an estimate, India has seen a 75% rise in fraud cases in the housing loan market in the last five years. Here, a fraudster typically avails multiple loans from the banks by mortgaging the same property. This makes it difficult for lenders to keep track of such activities or people.
Meanwhile, the Credit Information Bureau (India) (CIBIL), and TransUnion, a global player engaged in credit information management, on Thursday launched CIBIL TransUnion Mortgage Check, a product which will provide mortgage information to different lenders including banks, NBFCs, HFCs and financial institutions. The product, which is India?s first repository of mortgage information, has been developed in association with NHB.
Said Arun Thukral, MD ? Cibil: ?The product will address the need of an industry-wide system for fraud control in the face of rising number of fraud cases in the mortgage housing sector. It will help the financial institutions in two ways: loan acquisition and portfolio management. We have consulted the NHB, which gave the idea of developing such product.?