Tue. Feb 27th, 2024

As you know that our country is facing liquidity issues and the COVID-19 outbreak has not done any good to it especially the real estate sector. The government has been taking various measures to increase the liquidity inflow in the country. For the same, The Reserve Bank of India (RBI) made amendments to the administrative structure for housing finance companies (HFCs) on 22 October 2020.

The Apex Bank directed HFCs to lend at least 60% of their net assets to housing through the final RBI guidelines issued on 22 October, which is a follow-up to a drafted issued in June 2020. The RBI has also ordered HFCs and non-banking financial institutions, which may not currently lend an appropriate amount of their total housing loans, to achieve this stage by March 2024.

Net assets deployed for housing loans by HFCs

Timeline Min % of total assets Min % of total assets for individual

March 31, 2022 50% 40%

March 31, 2023 55% 45%

March 31, 2024 60% 50%

[Source: RBI]

“These HFCs are expected to submit a board-approved plan to the Reserve Bank within a period of three months, including a roadmap to meet the above-mentioned requirements and a schedule for transition,” read the final RBI guidelines.

The followings are the highlights of the Amendment made for HFC by RBI:

As per the RBI guidelines issues the word ‘providing finance for housing’ or ‘housing finance’ is not formally specified in past and hence they gave a formal definition of what housing finance means as follow.. Business Loans for Women

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