Mumbai: Rise in home prices “moderated significantly” in 2015-16 and there is no threat of any systemic risk from the housing sector with the gross NPAs amongst retail loans being contained, the RBI said.
“With gross non-performing asset (GNPA) ratio around 1.3%, the retail housing segment does not presently pose any significant systemic risk in the Indian context,” RBI said in the latest Financial Stability Report (FSR). Compared with the overall GNPA ratio of 7.6 % for the entire banking system as of March, the stress in retail loans is very low, which also explains banks’ eagerness to tap into this segment, it said. Following the 2008 financial crisis, which was traced to the housing bubble in the US, the regulatory vigil against potential risks has been increased. According to market watchers, there has been a huge jump in unsold inventories of realty players due to a variety of reasons. According to a recent report, there were 2.26 lakh unsold houses in the Mumbai Metropolitan Region by end of fiscal 2015-16, which is 31 % higher than the year-ago period.
