Housing fin cos to hike minimum liquid asset holding to 15% - RBI
This story was originally published at 20:57 IST on 12 August 2024
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MUMBAI – The Reserve Bank of India has directed deposit-taking housing finance companies to increase their minimum percentage of liquid assets to 15% of public deposits in a phased manner from the current 13%, the central bank said in a notification today. As per the guidelines, housing finance companies are required to increase their liquid assets to 14% by Jan 1 and 15% by Jul 1, the notification said.
The RBI has also decided that the regulations on safe custody of liquid assets for housing finance companies will be aligned with those of non-banking finance companies in the interest of harmonisation of regulations. It has also asked housing finance companies to provide full asset cover for public deposits. "Henceforth, it would be incumbent upon the housing finance companies concerned to inform National Housing Bank in case the above asset cover falls short of the liability on account of public deposits," the notification said.
Like non-bank lenders, housing finance companies will also be allowed to hedge the risks arising out of their operations and to issue co-branded credit cards. All housing finance companies can participate in currency futures, the RBI notification said. However, only non-deposit-taking housing finance companies having an asset size of 10 bln rupees can participate in currency options and interest rate futures markets on recognised stock exchanges. The central bank also laid out guidelines for housing finance companies regarding investments through alternate investment funds.
For non-banking finance companies, the RBI revised certain norms on repaying public deposits. The central bank said non-bank lenders need to intimate details of the maturity of the deposit to depositors at least 14 days before the maturity date. Earlier, NBFCs needed to intimate the details of the maturity to the depositors at least two months before the maturity date.
The revised regulations will be applicable from Jan 1, RBI said.
End
Reported by Kshipra Petkar
Edited by Saji George Titus
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