Page 37 - Banking Finance November 2021

ARTICLE

RBI'S PROPOSED

CHANGES TO

REGULATORY

FRAMEWORK

APPLICABLE TO

'HOUSING FINANCE

COMPANIES' HFCS

T he Central Government had, with effect from 9th are in tandem with that of NBFCs, the relevant paras in the

NBFC Master Directions would be made applicable mutatis
August 2019, transferred regulatory powers of
mutandis to HFCs. In areas where extant HFC regulation
the Housing Finance Companies (HFCs) from the
National Housing Bank (NHB) to the Reserve
be retained, or changes would be brought out wherever
Bank of India (RBI). Subsequently Reserve Bank of India has differs from that of NBFCs, either existing provisions would
now placed a draft of the changes proposed in the possible while ensuring that the changes are made in a least
regulations applicable to HFCs. "RBI has undertaken the said disruptive manner.
review and has identified a few changes which are proposed
to be prescribed for HFCs," the central bank said on June Given below are the major changes
18, 2020.
envisaged in the regulatory framework
A review of the extant directions/ guidelines applicable to for HFCs:
HFCs has been carried out with a view to regulating HFCs 1. Applicable law for the regulation of HFCs:
as a category of Non-Banking Financial Company (NBFC). Companies intending to function as HFCs shall seek
Accordingly, in areas where the extant regulation of HFCs
registration with the Reserve Bank under Section 29A
of NHB Act, 1987 and existing HFCs holding Certificate
About the author of Registration issued by NHB need not approach RBI

for fresh CoR.
Sailesh Kumar
Chief Manager (Faculty)
Staff Training Centre 2. Defining the term 'Providing Finance for
Union Bank Bhawan Housing' or 'Housing Finance'
Lucknow
It is observed that the term 'providing finance for housing'

BANKING FINANCE | NOVEMBER | 2021 | 37