This refers to IH&SMEFD Circular No. 03 dated May 06, 2014 on the above subject..

2. In this regard, it has been decided to replace the following in Housing Finance Prudential Regulations as under:

I. Definition:
6- Mortgage is the transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan or finance.

II. HF-8: Creation of Mortgage:
The house/plot (for construction of house) financed by the bank/DFI shall be mortgaged in bank’s/DFI’s favour by way of equitable or registered mortgage.

3. Furthermore, HF-10, to the extent of FSV, has been amended as under:

I. Forced Sale Value:
The benefit of FSV against NPLs of Housing Finance shall be applicable as follows:
i. 75% for the 1st & 2nd Year (from the date of classification)
ii. 50% for the 3rd and 4th Year (from the date of classification)
iii. 30% for the 5th year (from the date of classification)

4. All other instructions on the subject shall, however, remain unchanged..

5. Please acknowledge the receipt.