India’s First Mortgage Backed Pass Through Certificates Listed on the National Stock Exchange
Shri M. Nagaraju, Secretary, Department of Financial Services, Ministry of Finance **Announced India’s first **Mortgage Backed Pass Through Certificates (PTC)s on the National Stock Exchange by ringing a bell during an ceremony at 05 May 2025.
Understanding PTCs: The Importance of Housing Sector Development
In recent years, the housing sector has garnered significant attention from both financial institutions and policy makers due to its profound impact on the economy’s development trajectory. This blog post delves into India’s first **Mortgage Backed Pass Through Certificates (PTC)**s listed on the National Stock Exchange, highlighting their significance and broader implications for economic growth.
The PTC Issue: A Comprehensive Overview
The issue of Rs. 1,000 crores (Rs. 10,000 lakh) was fully subscribed by various banks, housing finance companies, and financial institutions as part of the Mortgage Backed Pass Through Certificates listed on the National Stock Exchange (NSE)**.
These PTCs are backed by a pool of housing loans originated by LIC Housing Finance Limited. The issue details include:
- Issue Face Value: Rs. 1,00,000/- per PTC
- Total Issue Size: Rs. 1,00,000 crores (Rs. 10,000 lakh)
- Fully Subscribed: The entire issue was subscribed by banks.
The Role of RMBS Development Company Limited (RMBC): A Key Factor
These PTCs were issued by the RMBSC Development Company Limited (RMBC), which had recently completed their initial MBS (Mortgage Buying Scheme) programs. These programs allowed banks to purchase housing loans through their equity positions in RMBC, making it a strategic choice for mitigating housing risks.
The Importance of PTCs in the Housing Finance Market
PTCs are a form of securitized loan products that offer benefits for both housing investors and financial institutions. Their importance lies in their ability to integrate with other industries, including infrastructure development, thereby enhancing the economy’s forward linkage.
Moreover, these instruments have the potential to act as an integrating factor within the housing finance market. By facilitating transferability between different asset classes, PTCs offer a pathway for more efficient resource allocation and economic growth.
The Role of NSE in PTC Listing: A Strategic Decision
Shri M. Nagaraju emphasized the strategic decision made by the Indian financial authorities to list these PTCs on the NSE. The decision was driven by the need to integrate PTCs with other market instruments, such as demat (dead _) and semi-demat (semi-dmat) instruments, which improve their appeal to investors.
The listing on the NSE is a significant step in India’s economic development strategy, aligning its housing finance sector with broader economic growth objectives.
Conclusion: The Road Ahead for Housing Finance
India’s **Mortgage Backed Pass Through Certificates (PTC)**s listed on the NSE represent a crucial milestone in advancing India’s housing finance sector. These instruments not only benefit individual homeowners but also provide a platform for banks and financial institutions to play a more strategic role in economic development.
The success of these PTCs is imperative for setting the trajectory of India’s economy. With continued focus on housing infrastructure, RMBS programs, and securitization trends, India’s economy is poised to thrive, ensuring long-term growth and prosperity for its citizens.