To illustrate, the housing loans and commercial real estate are the sectors which experienced high credit growth during the high credit phase of 2002-03 to 2006-07. Accordingly, the risk weights on real estate lending and mortgage backed securities over the years were increased.
The objective was not so much to lean against the wind of rising asset prices but as a cautionary measure to contain the exposure of the banking sector to sensitive asset classes where rapid credit expansion was observed. •  Banks are required to hold a minimum of 25 percent of their liabilities in the form of liquid domestic sovereign securities.