Review of regulatory framework for HFCs and harmonisation of regulations applicable to HFCs and NBFCs
HFCs shall ensure that full asset cover is available for public deposits accepted by them at all times
To be eligible for accepting public deposits, the deposit taking HFCs shall invariably obtain minimum investment grade credit rating as specified in Master Direction - Non-Banking Financial Company - Housing Finance Company (Reserve Bank) Directions, 2021 at least once a year.
In case their credit rating is below the minimum investment grade, such HFCs shall not renew existing deposits or accept fresh deposits thereafter till they obtain an investment grade credit rating.
The ceiling on quantum of public deposits held by deposit taking HFCs, which comply with all prudential norms and minimum investment grade credit rating as specified, shall stand reduced from 3 times to 1.5 times of net owned fund. Deposit taking HFCs holding deposits in excess of the revised limit shall not accept fresh public deposits or renew existing deposits till they conform to the revised limit. However, the existing excess deposits will be allowed to run off till maturity.
Currently, HFCs are allowed to accept or renew public deposits repayable after a period of twelve months or more but not later than one hundred and twenty months from the date of acceptance or renewal of such deposits.
It has been decided that henceforth, the public deposits accepted or renewed by HFCs shall be repayable after a period of twelve months or more but not later than sixty months. Existing deposits with maturities above sixty months shall be repaid as per their existing repayment profile.
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