Hence IRB banks could avoid assuming high risk exposures. Since banks adopting Standardised Approach are not equally risk sensitive and since the relative capital requirement would be less for the same exposure, the banks on Standardised Approach could be inclined to assume exposures to high risk clients, which were not financed by IRB banks.
Second home interest rate applies to re-borrowers who don’t conform to the above conditions. Third, the Supplementary Notice prescribes that housing provident fund loans are also subject to the Notice. Either housing provident fund loans or commercial loans are the  BIS Review 3/2008  5  liabilities of households. Housing provident fund loans will not exempt from market volatility.