RBI further added that there are no concerns around systemic risk from this sector, despite a trivial raise in the stressed advances in the retail housing sector in recent quarters.
Mumbai, January 5: Reserve Bank of India report said that Realty regulator is likely to adversely impact the housing finance companies. However, RBI added that there are no concerns around systemic risk from this sector.
RBI announced this in an attempt to curb speculative activities in the realty sector on Thursday.
On Thursday, RBI’s Financial Stability Report said, “The push to regulate the realty sector is likely to have an impact on housing finance segments as it may help curb speculative activities significantly.”
However, the reports said that there are no concerns around “systemic risk” from this sector, despite a minor raise in the stressed advances in the retail housing sector in the recent quarters.
Both Houses of the Parliament earlier this year have passed The Real Estate Regulatory Bill (RERA). Moreover, framing of draft rules the concerned Bill is under process now. Majority of Experts also believe that demonetization move by Modi Government may have adverse impact on the realty sector.
Following a slowdown in credit demand by corporate due to both slow economic growth and cheaper options in the money markets, many lenders are focusing on the high-value housing loans (Retail Segment).
After moderating for four consecutive quarters, the all-India house price index posted an annual raise of 7.3 per cent as at the end of the first quarter of 2016-17, the FSR said. The NSE’s Nifty indices outperformed both the Emerging Market indices and MSCI World Market Indices from the start of this financial year till Nov.2016, among other asset classes, the FSR added.
Though rising importance of the domestic institutional investors can be ignored but the foreign portfolio investors (FPIs) carry on to play vital role in the swings of currency, equity, and bond markets and net positions of FPIs in Indian markets turned negative in 2015-16.
Author: Akash Singh
Akash Singh is a passionate free lance writer based in Noida. He’s designed the content for various reputed online financial and real estate portals. He has completed his Bachelor’s in Management from Mumbai University and has earned his MBA International Business (HR) Degree from prestigious Amity University. He loves to invest his time in the laps of nature, and enjoys life to the fullest.