RBI's guidelines don't impact HFCs materially, says Indiabulls' Gagan Banga
The Reserve Bank of India (RBI) has released a new set of directions related to maintenance of liquidity coverage ratio, risk management, asset classification and loan-to-value ratio, among others, for housing finance companies (HFCS). These measures, which were announced in October 2020, have come into effect as of now. Gagan Banga, Vice Chairman and Managing Director, Indiabulls Housing Finance shared his views and outlook on the same.
The Reserve Bank of India (RBI) has released a new set of directions related to maintenance of liquidity coverage ratio, risk management, asset classification and loan-to-value ratio, among others, for housing finance companies (HFCS).
These measures, which were announced in October 2020, have come into effect as of now. Gagan Banga, Vice Chairman and Managing Director, Indiabulls Housing Finance shared his views and outlook on the same.
“What RBI has effectively done through this is it has harmonized whatever further regulations pertaining to non-banking financial companies (NBFCs) and HFCs wherever there was a gap,” he said.
“Most large HFCs would be much larger, nothing in this is disruptive for the large HFCs, specifically for Indiabulls Group, etc it is not even relevant,” he added.
“We do not lend to our group entities. From a more general reaction to that, 15 percent and 25 percent or most things that are there in the compiled circular are already in play,” he said.
The company has cash covering almost the next one year of repayments as against 50 percent of the next 30 days that is being prescribed by the regulator, he said.
According to him, whatever the RBI is doing for the last one to one and a half years is firmly taking grip of the housing finance sector and strengthening its grip on the wider NBFC sector.
In terms of Sameer Gehlaut’s plans, he said, “Sameer Gehlaut is the founder of Indiabulls Housing. He has chosen to dedicate his executive time to Dhani, which is the group’s consumer finance and telemedicine app. He has already indicated two years ago that as far as Indiabulls Housing is concerned, at an appropriate time he is happy to hand over control to an institutional investor and he is happy to remain a minority investor. He is a debt-free individual so he has no requirements to divest. His stake is about 21.5 percent.”
“Over a period of time – we already have close to about 50 percent of the company owned by financial institutions and that is the path that we have to continue to follow,” he said.
As a financial entity, one is always in discussions for various forms of capital. “I don’t have a deal on the table that I can be discussing,” he mentioned.
For more, watch the video.
(Edited by : Anshul)
First Published: Feb 18, 2021 2:17 PM IST
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