Home India Reserve Bank of India In exercise of the powers conferred under Section 35B read w...
Date: 31-Dec-2024 Category: Extra Ordinary State: Union Government Country: India

In exercise of the powers conferred under Section 35B read with sub sections 1 and 2 of Section 29B of the National Housing Bank Act,

Issued by Reserve Bank of India · Not Applicable

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Executive Summary & Key Takeaways

What it means

  • This gazette notification issued by the Reserve Bank of India (RBI) mandates that Housing Finance Companies (HFCs) which accept public deposits must maintain a minimum percentage of liquid assets. This replaces the previous notification issued by National Housing Bank on May 25, 2019.
  • The notification specifies the minimum percentage of public deposits that HFCs must invest in unencumbered approved securities and maintain in liquid forms such as term deposits, certificates of deposits, or bonds issued by National Housing Bank.

Key Changes

  • The notification mandates a phased increase in the minimum liquid asset requirements for HFCs accepting public deposits.
  • Effective January 1, 2025, HFCs must invest at least 8% of their outstanding public deposits in unencumbered approved securities.
  • Effective July 1, 2025, this investment requirement increases to 10% of outstanding public deposits.
  • Effective January 1, 2025, HFCs must maintain a total of at least 14% of their outstanding public deposits in liquid assets (including the investment in securities mentioned above).
  • Effective July 1, 2025, this total liquid asset requirement increases to 15% of outstanding public deposits.
  • The liquid assets can be held in the form of unencumbered approved securities, term deposits with scheduled banks, certificates of deposit, deposits with National Housing Bank, or bonds issued by National Housing Bank.
  • The percentage is calculated based on the public deposits outstanding at the close of business on the last working day of the second preceding quarter.
  • The definition of 'public deposit' remains consistent with the Master Direction – Non-Banking Financial Company – Housing Finance Company (Reserve Bank) Directions, 2021, as amended from time to time.

Impact Analysis

Housing Finance Companies (HFCs)

  • There will be an increased compliance burden on HFCs, requiring them to track and report on their liquid asset positions.

Public Depositors

  • The notification indirectly protects the interest of public depositors by ensuring that HFCs maintain enough liquid assets to meet their obligations.

National Housing Bank (NHB)

  • NHB will play a key role in facilitating compliance by providing investment options to HFCs.

Scheduled Banks

  • Scheduled banks will need to be prepared to handle the potential increase in deposits from HFCs.

Regulator (RBI)

  • RBI may need to issue further clarifications or guidelines to ensure the smooth implementation of the notification.

Action Items for HFCs

  • Communicate the changes to relevant stakeholders within the organization.

Key Entities Referenced

Reserve Bank of India (RBI): The central bank of India, responsible for regulating the financial system and issuing this notification. National Housing Bank (NHB): A financial institution that plays a key role in the housing finance sector and provides investment options to HFCs. Housing Finance Companies (HFCs): Companies that provide housing finance and are the primary entities affected by this notification. National Housing Bank Act, 1987: The legislation under which the notification is issued and which empowers RBI to regulate HFCs. Master Direction – Non-Banking Financial Company – Housing Finance Company (Reserve Bank) Directions, 2021: The document that defines 'public deposit' for the purposes of this notification.
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रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99 सी.जी.-एम.एच.-अ.-31122024-259769 xxxGIDHxxx CG-MH-E-31122024-259769 xxxGIDExxx असाधारण EXTRAORDINARY भाग III—खण् ड 4 PART III—Section 4 प्राजधकार स ेप्रकाजित PUBLISHED BY AUTHORITY स.ं 1087] िई दिलली, मगं लर्ार, दिसम्ब र 31, 2024/पौष 10, 1946 No. 1087] NEW DELHI, TUESDAY, DECEMBER 31, 2024/PAUSHA 10, 1946 भारतीय ररज़र् व बकैं (जर्जियमि जर्भाग) (केंद्रीय कायालव य) अजधसचू िा म ंबई, 19 दिसम् बर, 2024 चल आजस्ट्त के न्यिू तम प्रजतित को बिाए रखिा अजधसचू िा स.ं जर्जर्.एफआईएि.34/03.10.136/2024-25.––भारतीय ररज़र् व बैंक राष्ट्रीय आर्ास बैंक अजधजियम, 1987 (1987 का 53) की धारा 29बी की उप-धारा (1) और (2) के साथ परित धारा 35बी के तहत प्रित्त िजियों का प्रयोग करत े हुए और राष्ट्रीय आर्ास बैंक द्वारा दििांक 25 मई 2019 को िारी पूर् व अजधसूचिा स.ं रा.आ.बैंक.आ.जर्.कं.एलए-2/एमडीएंडसीईओ/2019 का अजधक्रमण करत े हुए इस बात से संत ष्ट होकर दक ऐसा आर्श्यक ह ै एति ् द्वारा घोषणा करता ह ै दक उि अजधजियम की धारा 29बी की उप-धारा (1) और (2) के प्रार्धाि आर्ास जर्त्त संस्ट्थाि पर लाग ूिहीं होंगे िो एक कंपिी ह,ै बित े दक- (ए) प्रत्येक आर्ास जर्त्त संस्ट्थाि िो एक कंपिी ह,ै िो सार्विजिक िमा स्ट्र्ीकार करती ह ै (1) भारत म ें भार-रजहत अि मोदित प्रजतभूजतयों, जिसका मलू यांकि ऐसी प्रजतभूजतयों के चाल ू बािार मूलय स े अजधक ि हो, में उतिी राजि जिर्ेि करेगी और जिर्ेि को िारी रखगे ी, िो दकसी भी दिि कारोबार की समाजि पर, िसू री पूर्वर्ती 8499 GI/2024 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4] जतमाही के अंजतम कायव दिर्स को कारोबार की समाजि पर बकाया सार्विजिक िमा के जिम्नजलजखत प्रजतित से कम िहीं होगी: (i) 01 ििर्री 2025 को और उसके बाि आि प्रजतित (ii) 01 ि लाई 2025 को और उसके बाि िस प्रजतित (2) भारत म ें दकसी अि सूजचत बैंक के खात े में मीयािी िमा अथर्ा िमा प्रमाणपत्र (प्रभार अथर्ा ग्रहणाजधकार से मि ) अथर्ा राष्ट्रीय आर्ास बैंक में िमा अथर्ा राष्ट्रीय आर्ास बैंक द्वारा िारी बांडों में अजभिाि के रूप में अथर्ा अंितः ऐस े खाते में अथर्ा ऐसी िमा राजि में अथर्ा अिं तः ऐसे अजभिाि के रूप में एक राजि, िो दकसी भी दिि कारोबार की समाजि पर, खंड (1) के अधीि दकए गए जिर्ेि के साथ, िसू री पूर्वर्ती जतमाही के अंजतम कायव दिर्स को कारोबार की समाजि पर बकाया सार्विजिक िमा के जिम्नजलजखत प्रजतित से कम िहीं होगी : (i) 01 ििर्री 2025 को और उसके बाि चौिह प्रजतित (ii) 01 िल ाई 2025 को और उसके बाि पंद्रह प्रजतित (बी) धारा 29बी के अन्य सभी प्रार्धाि आर्श् यक पररर्तविों सजहत उपरोि आर्श्यकता पर लाग ू होंगे िैसेदक अजभव्यजि “सार्विजिक िमा” उि धारा के तहत पररकजलपत “िमाराजि” के समाि ह।ै स्ट्प ष्ट ीकरण: “सार्विजिक िमा” का र्ही आिय ह ैिो मास्ट्टर जििेि- गैर-बैंककंग जर्त्तीय कंपिी – आर्ास जर्त् त कंपिी (ररज़र्व बैंक) जििेि, 2021 के पैराग्राफ 4.1.30 के तहत जिर्िष्टव ह,ै जिसे समय-समय पर यथासंिोजधत दकया िाता ह।ै िे.पी. िमाव, म ख्य महाप्रबंधक [जर्ज्ञापि-III/4/असा./855/2024-25] RESERVE BANK OF INDIA (Department of Regulation) (CENTRAL OFFICE) NOTIFICATION Mumbai, the 19th December, 2024 Maintenance of a minimum percentage of liquid assets Notification No. DOR.FIN.34/03.10.136/2024-25.— In exercise of the powers conferred under Section 35B read with sub-sections (1) and (2) of Section 29B of the National Housing Bank Act, 1987 (53 of 1987) and in supersession of the Notification No. NHB.HFC.LA-2/MD&CEO/2019 dated 25th May 2019, previously issued by National Housing Bank, the Reserve Bank being satisfied that it is necessary so to do, hereby declares that the provisions of sub-sections (1) and (2) of Section 29B of the said Act shall not apply to housing finance institution which is a company, subject to, however that— (A) Every housing finance institution which is a company, accepting public deposits shall (1) invest and continue to invest in India in unencumbered approved securities, valued at a price not exceeding the current market price of such securities, an amount which, at the close of business on any day, shall not be less than the[भाग III—खण् ड 4] भारत का रािपत्र : असाधारण 3 following per cent of the public deposits outstanding at the close of business on the last working day of the second preceding quarter: (i) on and from January 01, 2025 eight per cent (ii) on and from July 01, 2025 ten per cent (2) maintain in India in an account with any scheduled bank in term deposits or certificate of deposits (free of charge or lien) or in deposits with the National Housing Bank or by way of subscription to the bonds issued by the National Housing Bank, or partly in such an account or in such deposit or partly by way of such subscription, a sum which, at the close of business on any day, together with the investment made under clause (1), shall not be less than the following per cent of the public deposits outstanding at the close of business on the last working day of the second preceding quarter: (i) on and from January 01, 2025 fourteen per cent (ii) on and from July 01, 2025 fifteen per cent (B) All other provisions of Section 29B shall mutatis mutandis be applicable to the above requirement as if the expression “public deposit” is the same as the expression “deposit” as contemplated under the said section. Explanation: “Public deposit” shall have the same meaning as assigned under paragraph 4.1.30 of the Master Direction – Non- Banking Financial Company – Housing Finance Company (Reserve Bank) Directions, 2021, as amended from time to time. J. P. SHARMA, Chief General Manager [ADVT.-III/4/Exty./855/2024-25] Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064 and Published by the Controller of Publications, Delhi-110054.

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