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SBI Boosts India's Mortgage Securitisation Market
5 Jul
Summary
- SBI joins RDCL as a shareholder to enhance mortgage securitisation.
- RDCL aims to deepen India's residential mortgage-backed securities market.
- Securitisation helps lenders free up capital for fresh lending.
State Bank of India (SBI) has been inducted as a shareholder into RDCL, an entity established in 2024 with a paid-up capital of ₹500 crore. RDCL is being developed as a specialized market intermediary to deepen India's residential mortgage-backed securitisation (RMBS) market. Its existing shareholders include prominent banks, housing finance companies, NBFCs, and the Life Insurance Corporation of India (LIC).
This development is significant as it bolsters RDCL's capacity to facilitate the pooling of long-term, illiquid home loans by banks and non-bank lenders. Through securitisation, lenders can convert these assets into tradable securities, thereby freeing up crucial capital and improving liquidity. This capacity enhancement is particularly vital when deposit growth trails credit expansion.
RDCL is strategically positioned to encourage participation from long-term institutional investors, such as insurance companies and pension funds, in the residential mortgage market. By functioning as a commercially sustainable intermediary, RDCL aims to cultivate a deep and liquid secondary mortgage market. This initiative enables lenders to efficiently securitise their housing loan portfolios, optimizing capital redeployment.
Recently, RDCL successfully completed a ₹180-crore securitisation transaction involving home loans from Punjab Housing Finance, with Edelweiss Life Insurance as the anchor investor. This follows RDCL's maiden transaction on May 5, 2025, where it securitised a ₹1,109-crore pool of home loans originated by LIC Housing Finance, with LIC acting as the anchor investor.
