The Reserve Bank of India (RBI) has added a rider for offloading its
stake in the National Housing Bank (NHB) to the government by
suggesting it handle
the regulation, licensing and supervision of housing companies to
provide banks and housing finance companies a level playing field.

Housing finance companies are currently regulated by NHB, which is, in
turn, regulated by RBI. NHB is wholly-owned by RBI.

Sources close to the developments said the government is yet to take a
decision on the suggestion since RBI's proposal has met with some
opposition. Ownership
of NHB will give the government greater say in the boards of housing
finance institutions and flexibility to issue directions to meet its
priority sector
credit objectives.

RBI sources said the need for regulating housing companies arise
because they do not have prudential guidelines or risk-linked capital
limits to which banks,
which come under the central bank's purview, are subject.

(10-Aug-09)

Business Standard
thanks,
mukesh jain.


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