The Reserve Bank of India (RBI) on August 12 released revised regulations for the non-banking finance companies (NBFC) and housing finance companies (HFC). The central bank has modified regulations of NBFCs and HFCs in terms of acceptance of public deposit, maintenance for minimum percentage of liquid assets, full cover for public deposit, repayment of public deposit in order to meet certain expenses of an emergent nature, among others.
The revised regulations will be applicable from January 1, 2025.
Since the transfer of regulation of HFCs from National Housing Bank (NHB) to
Reserve Bank with effect from August 09, 2019, various regulations have been issued
treating HFCs as a category of NBFCs, the RBI said in a release.
The RBI further added that to be consistent with this policy stance an analysis of regulations applicable to HFCs and NBFCs was undertaken, with an objective of harmonising these regulations, duly considering specialised nature of the HFCs.
The RBI said it has been decided that all deposit taking HFCs shall maintain, on an ongoing basis, liquid assets to the extent of 15 per cent of the public deposits held by them, in a phased manner.
Further, regulations on safe custody of liquid assets for HFCs shall be aligned with those of NBFCs in the interest of harmonization of regulations, release said.
The central bank has decided that the instructions on Branches and appointment of agents to collect deposits shall, mutatis-mutandis, be applicable to deposit taking HFCs, and necessary notification by HFCs as required in these instructions shall be sent to NHB.
Deposit taking HFCs shall fix Board-approved internal limits separately within the limit of direct investment, for investments in unquoted shares of another company which is not a subsidiary company or a company in the same group of the HFC. Such Board-approved internal limit shall form part of overall limits and sub-limits for exposure to capital market for deposit taking HFCs, RBI said.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
