The risk weights on housing loans extended by banks to individuals against mortgage of housing properties and investments in mortgage backed securities (MBS) of housing finance companies (HFCs), recognised and supervised by National Housing Bank (NHB) were increased from 50 per cent to 75 per cent in December 2004.
However, on a review, banks were advised to reduce the risk weight in respect of exposures arising out of housing loans up to Rs.30 lakh (USD 75,000 approx) to individuals against the mortgage of residential housing properties from 75 per cent to 50 per cent, in view of the lower perception of risks in these exposures.