look news india
Mumbai: The Reserve Bank has tightened deposit acceptance norms for housing finance companies (HFCs) receiving deposits from the public and brought them at par with non-banking finance companies (NBFCs). As per the new norms, HFCs will now be able to hold only one and a half times their net owned funds (NOF) in public deposits instead of the existing three.
The norms for accepting public deposits have been relaxed for HFCs as compared to NBFCs. HFCs which currently have deposits in excess of the new norms will not be able to accept new deposits and renew old deposits. To do so, they will have to comply with the new limits. However, according to a circular issued by the Reserve Bank, the maturity of deposits in excess of the currently set limit can be continued.
The decision is considered to be part of keeping the deposit guidelines same for both NBFCs and HFCs.
RBI sources said that currently there are 97 HFCs in the country but the number of deposit taking NBFCs including HFCs is 26.
For the last twenty years RBI has not allowed new NBFCs to accept deposits.
In another decision, the Reserve Bank has increased the liquid asset requirement for HFCs to 15 per cent of public deposits from the current 13 per cent. This norm will be implemented in phases from early 2025.
HFCS cannot accept or renew public deposits for a period of less than one year and more than five years. At present, deposits older than five years can be continued till their maturity.
