Finance News
By: InvestmentGroww.com
In its phased shift to stricter regulation of housing finance companies (HFCs) for harmonizing them with non-banking financial companies (NBFCs), the RBI released revised guidelines.
According to the central bank, these revised regulations will be effective from 1st January 2025.
The RBI said that compared to NBFCs, HFCs accepting public deposits have more lenient prudential norms regarding deposit acceptance.
The new regulations increase maintenance of the minimum percentage of liquid assets by HFCs.
From 6.5% earlier, the limit is now at 8 per cent in relation to unencumbered approved securities held by HFC’s as a proportion of public deposits.
Also, it was decided to align the rules on safe custody of liquid assets for HFC’s with those for NBFC’S.
In future if such above mentioned asset cover do not match up with liability due on public deposits they should inform NHB accordingly immediately without delay.
HCF’s would have to make sure such public deposits accepted by them should only become repayable after 12 months but before 60 months’ time period.
Previous maturity profile will be applicable for all those deposits with a maturity above 60 months.
these new guidelines provide that HFCs shall comply with NBFC regulations in respect of opening branches and appointing agents to collect deposits.
As regards some other regulations treating HFCs as a class of NBFCs have been released since transfer of regulation of HFC’s from NHB to Reserve Bank w.e.f. August 09, 2019