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Informist, Wednesday, Jan. 29, 2025

--RBI: NBFCs' NCD pvt placement norms to now also apply to home loan cos 

MUMBAI - The norms for private placement of non-convertible debentures by non-banking financial companies will now also apply to housing finance companies, the Reserve Bank of India said in a notification on Wednesday. "The revised guidelines shall be applicable to all fresh private placements of NCDs (with maturity more than one year) by housing finance companies from the date of this circular (Jan 29)," the RBI said in its notification. 

As per the guidelines, NBFCs must have a board-approved policy for resource planning, which includes planning horizon and periodicity of private placement.

NBFCs can issue debentures only for deploying funds on their own balance sheet, not to facilitate resource requests of group entities, parent companies, or associates. Furthermore, NBFCs are prohibited from extending loans against the security of their own debentures (issued either by way of private placement or public issue). Tax-exempt bonds offered by NBFCs are exempt from these guidelines.

The new norms will require housing finance companies to comply with the same disclosure and transparency requirements as NBFCs when issuing NCDs through private placement.  End

Reported by Vaishali Tyagi

Edited by Vandana Hingora

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