RBI should regulate all home loans

State Bank of India sees no need for a separate regulator.

India’s largest banking and financial services company by assets believes the Reserve Bank of India, the central bank, should be the regulator for all home loans provided by banks or housing finance companies (HFCs). Banks account for over than two-thirds of total home loans in India.

“I see no justification for having a separate regulator for home loans,” said Chairman Pratip Chaudhuri. “Perhaps, the regulations of objective would be better served with RBI itself becoming the sole regulator for all loans including home loans.”

Chaudhuri believes a single regulator having the same rules for all players would help remove the regulatory arbitrage that existed between banks and HFCs.

RBI currently regulates home loans provided by all commercial banks, while HFCs offer home loans regulated by the National Housing Bank.