State Bank of India, the country’s largest lender, has acquired a 10% stake in RMBS Development Company Limited (RDCL), a specialised non-banking financial company set up to develop India’s residential mortgage-backed securitisation market. Following the transaction, the National Housing Bank’s (NHB) shareholding in RDCL has reduced from 39% to 29%, while SBI joins the company as a key institutional shareholder. This move signals growing institutional confidence in RDCL’s role as a market intermediary for securitising home loans.
What Is RMBS Development Company Limited?
RDCL is a middle-layer NBFC incorporated in March 2024 with a paid-up capital of ₹500 crore and its registered office in Mumbai. It received its Certificate of Registration from the Reserve Bank of India (RBI) on January 23, 2025 to commence operations. The company was promoted by the National Housing Bank (NHB) , which was established on July 9, 1988 under the National Housing Bank Act, 1987, and is headquartered in New Delhi.
RDCL’s mandate is to act as a commercially sustainable market intermediary to facilitate the growth of the Residential Mortgage-Backed Securitisation (RMBS) market in India. Its core activities include investing in RMBS issuances, extending credit enhancements, providing liquidity support in the secondary market, promoting standardised processes and documentation, and building an information repository for RMBS transactions.
The company brings together a diverse set of shareholders from across the financial system:
| Shareholder | Stake |
|---|---|
| National Housing Bank (NHB) | 29% (reduced from 39%) |
| State Bank of India (SBI) | 10% (newly acquired) |
| Life Insurance Corporation of India (LIC) | 10% |
| HDFC Bank | 7% |
| ICICI Bank | 7% |
| Bajaj Finance | 7% |
| Aditya Birla Housing Finance | 5% |
| Tata Capital Housing Finance | 5% |
| Truhome Finance | 5% |
| Grihum Housing Finance | 5% |
| Hero Housing Finance | 5% |
| IIFL Home Finance | 5% |
Six housing finance companies each hold 5% stakes, alongside major banks and LIC, creating a broad consortium committed to deepening the RMBS market.
Why SBI’s Entry Matters
SBI is India’s largest commercial bank and the single largest home loan lender in the country. Its chairman is Challa Sreenivasulu Setty, who took office on August 28, 2024. The bank’s entry as a 10% shareholder in RDCL carries strategic significance on multiple fronts.
First, SBI’s involvement brings massive credibility and scale to RDCL’s operations. As the largest originator of home loans in India, SBI’s participation can help drive standardisation in securitisation practices across the industry.
Second, the transfer of stake from NHB to SBI aligns with NHB’s stated intention to dilute its holding while maintaining a minimum 26% stake in RDCL. At the time of RDCL’s formation, NHB had indicated that its shareholding would eventually be reduced as other institutions joined the company.
Third, SBI’s entry comes at a time when India’s housing loan market is expanding rapidly. The outstanding retail home loan portfolio stood at approximately ₹44.4 lakh crore as of March 2026. This pool presents a massive opportunity for securitisation. Even securitising a fraction of these loans could unlock significant capital for fresh lending.
Understanding Residential Mortgage-Backed Securitisation
Residential Mortgage-Backed Securitisation (RMBS) is a financial process in which a lender bundles together thousands of individual home loans into a single pool and issues securities backed by the future repayments from those loans. These securities, known as Pass-Through Certificates (PTCs) , are then sold to institutional investors such as insurance companies, pension funds, and mutual funds.
The process works in a straightforward manner. A bank or housing finance company originates home loans to borrowers. Instead of holding these loans on its books for the full 15 to 20 year tenure, the lender transfers a pool of loans to RDCL, which structures and issues PTCs against that pool. Investors who buy these PTCs receive the monthly EMIs from borrowers as coupon payments. The lender gets immediate liquidity and can use the released capital to originate new loans.
This mechanism helps address a structural challenge in Indian banking: deposit growth lagging credit expansion. When lenders can securitise their loan portfolios, they reduce their dependence on deposits and bond markets as sources of funding. The capital freed up through securitisation can be redeployed for fresh lending, potentially making home loans more affordable and accessible.
India’s securitisation market reached a record ₹2.55 lakh crore in FY2026, driven largely by NBFCs. However, the RMBS segment has traditionally remained small compared to auto loan or microfinance securitisation. RMBS accounted for less than 15% of the overall securitisation market as of FY2024. This is precisely the gap that RDCL aims to close.
RDCL’s Track Record and Market Progress
Since commencing operations, RDCL has actively executed securitisation transactions. On May 5, 2025, RDCL listed the first-ever RMBS transaction on the National Stock Exchange (NSE) . The deal involved securitising a ₹1,109 crore home loan pool originated by LIC Housing Finance. LIC invested ₹900 crore as the anchor investor, while NHB subscribed ₹100 crore. The PTCs carried a coupon rate of 7.26% payable monthly, with a door-to-door maturity of about 20 years (maturing in February 2045).
More recently, RDCL completed a ₹180 crore securitisation transaction involving home loans originated by Punjab Housing Finance, with Edelweiss Life Insurance acting as the anchor investor at ₹54 crore, alongside participation from PNB MetLife Insurance and Zuno General Insurance.
RDCL had earlier announced plans to structure 7 to 10 more RMBS transactions aggregating ₹10,000 to ₹12,000 crore in FY2026. The company also indicated that it would eventually consider allowing retail investors to invest in PTCs, which would deepen the investor base beyond institutional players.
Key Takeaways
- State Bank of India has acquired a 10% stake in RMBS Development Company Limited (RDCL) from the National Housing Bank (NHB) .
- NHB’s shareholding in RDCL declined from 39% to 29% following the transaction, while NHB has committed to maintaining at least a 26% stake.
- RDCL was incorporated in March 2024 with a paid-up capital of ₹500 crore and received RBI registration on January 23, 2025.
- RDCL is a middle-layer NBFC headquartered in Mumbai, focused on developing the Residential Mortgage-Backed Securitisation (RMBS) market in India.
- NHB was established on July 9, 1988 under the National Housing Bank Act, 1987 and is headquartered in New Delhi.
- India’s outstanding retail home loan portfolio stood at approximately ₹44.4 lakh crore as of March 2026, representing a large opportunity for securitisation.
