MDs and CROs of Housing Finance Companies Discuss Current Trends in Risk Management:
The National Housing Bank (NHB) has recently asked all housing finance companies (HFCs) with more than `50 billion in assets to appoint chief risk officers, citing the need for strengthening risk management practices in the industry. The directive comes in the wake of some HFCs and NBFCs facing liquidity issues after the IL&FS defaults came to light, underscoring the mismatches between assets and liabilities in this sector. As per the NHB directive, the CRO is required to function independently to ensure the highest standard of risk management. NHB stipulates that the CRO, who will have voting power in credit sanction proposals, should be a senior officer with adequate professional qualifications and experience. Boards of HFCs can appoint CROs for a fixed tenure. Her/his role in deciding credit proposal will be limited to that of an advisor and will be involved in the process of identification, measurement and mitigation of risk.
TOP RISKS
HFCs today face risks involving liquidity, credit, ALM, operational and lack of funding. The availability of funds for HFCs has reduced significantly from all sources and this further restricted the ability for fresh lending and maintaining of healthy book sizes.
Deepak Patkar, group CRO at Magma Fincorp and Magma Housing Finance explains the top risks faced by HFCs: “The asset liability mismatch, or ALM, risk is a crucial risk. Prudent HFCs have started correcting their positions of mismatch over the last 3-4 quarters. The liquidity crisis has slowed down that process, which could lead to stress on cash flows in the short to medium term. Another major risk is the one associated with construction/builder financing. With banks becoming allergic to even reputed real estate developers,
This story is from the August 2019 edition of Banking Frontiers.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the August 2019 edition of Banking Frontiers.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber? Sign In
Kamdhenu & Sammrudhi loans top rural customers
Unnayan Bharat Finance Corporation (UBFC) Director & Co-Founder Avneesh Trivedi shares the company's attempts to enhance the rural lending environment & deliver better services to its consumers:
It's going to be a 'world' of CBDCs
Practically, every central bank in the world is testing and readying a CBDC system:
Training for behavioral & social skills is key
3 CHROs from the top BFSI companies in India open up about their training and motivation programs aimed at enhancing employee effectiveness. The story is divided into 4 parts: (i) functional and behavioral training, (ii) manager to leadership training, (iii) learning-based training, (iv) motivational programs:
THE AI COMPASS
Artificial Intelligence has risen to be the hottest topic of discussion today. It is expected to impact everyone, and the impact could exceed that of war, global warming, supply chain disruptions, geopolitics, and much more.
To mentor & coach emerging leaders
Manish Shah, MD & CEO of Godrej Capital, outlines his focus areas today and in the future:
Innovation will unlock India's Mission 'Atmanirbhar’
Sunita Handa is Chairman, Toyota FSIN and Principal Advisor & TLAB Chairman, Protectt.ai Labs. She shares her current activities and her deep insights on innovaiton in an interaction with Manoj Agrawal:
Algorithm is the Boss
Irem Sayeed, Chief Credit Officer at U GRO Capital, dwells into business focus and modernization at the lender:
Fintech and Neobank under the same Umbrella
It was started in 1902 to build what came to be called Israel:
Bajaj Allianz Revolutionizes Employee's HR and IT Experience with WhatsApp, MS Teams, Al and Automation
A productivity booster shot at BALIC:
Small Beginning for a Big Opportunity
AMU Leasing's focus on serving the underserved market of individuals and fleets looking for financing for electric 3-wheelers and 2-wheelers: