What changed
RBI issued a consolidated version of the Mortgage Guarantee Company (Reserve Bank) Guidelines, 2008, incorporating all amendments up to June 30, 2011. The circular replaces the earlier notification dated February 15, 2008, and brings all current instructions under one document.
What it means for you
For mortgage guarantee companies, this circular simplifies compliance by providing a single reference document. Banks and housing finance companies dealing with mortgage guarantees can rely on updated definitions and operational guidelines as per the consolidated text.
What you must do
- Review the consolidated guidelines to ensure your operations align with the updated definitions and scope.
- Update internal compliance manuals to reference the July 1, 2011 circular as the current regulatory standard.
- Train staff on the definitions of 'default', 'trigger event', and 'mortgage guarantee' as per the guidelines.
- Verify that all mortgage guarantee contracts with creditor institutions comply with the framework.
Who it affects
Mortgage guarantee companies registered with RBI, Banks and housing finance companies (creditor institutions), Borrowers availing housing loans with mortgage guarantees
Does this circular introduce new requirements for mortgage guarantee companies?
The circular consolidates existing guidelines from 2008 with amendments up to June 30, 2011. It does not explicitly state whether new requirements are introduced; it reproduces the guidelines as amended.