Date: 2021-08-25Category: Not ApplicableState: Union GovernmentCountry: India
Notification as ‘Financial Institution’ under Section 2(1)(m)(iv) of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act)
**Summary:**
This Reserve Bank of India (RBI) notification, RBI/2021-22/91 DOR.FIN.REC.No.4103/10.136/2021-22 dated August 25, 2021, addresses all Housing Finance Companies (HFCs) regarding their notification as Financial Institutions under Section 2(1)(m)(iv) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002.
The Government of India (GoI), via Gazette Notification No. S.O. 2405(E) dated June 17, 2021, has notified HFCs registered under Section 29A(5) of the National Housing Bank Act, 1987, and possessing assets worth ₹100 crore or more, as Financial Institutions under the specified section of the SARFAESI Act.
Consequently, the criteria previously outlined in Para 105 of the Master Direction – Non-Banking Financial Company – Housing Finance Company (Reserve Bank) Directions, 2021, concerning notification as a Financial Institution, are withdrawn with immediate effect. The Master Direction is being modified to reflect this change.
For further information, contact J.P. Sharma, Chief General Manager, Department of Regulation, Central Office, 2nd Floor, Main Office Building, Shahid Bhagat Singh Marg, Fort, Mumbai – 400 001. Telephone: +91 22 22709038; Email: helpdnbr@rbi.org.in.
Key Entities Referenced
Housing Finance Companies: A type of Non-Banking Financial Company that specializes in providing financing for housing.
Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002: A law that provides a legal framework for securitization and asset reconstruction in India, also known as SARFAESI Act.
SARFAESI Act: An abbreviation for Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
Master Direction NonBanking Financial Company Housing Finance Company Reserve Bank Directions, 2021: A set of guidelines issued by the Reserve Bank of India (RBI) for Housing Finance Companies.
Financial Institution: An organization engaged in financial activities, such as banking, insurance, or investment.
National Housing Bank Act, 1987: An act that established the National Housing Bank (NHB) as the apex institution for housing finance in India.
Government of India: The Union Government of the Republic of India.
Mumbai, Maharashtra: City in India where the Central Office of the Department of Regulation, Reserve Bank of India is located.
RBI/2021-22/91
DOR.FIN.REC.No.41/03.10.136/2021-22 August 25, 2021
All Housing Finance Companies (HFCs)
Dear Sir/ Madam,
Notification as ‘Financial Institution’ under Section 2(1)(m)(iv) of Securitisation
and Reconstruction of Financial Assets and Enforcement of Security Interest
Act, 2002 (SARFAESI Act)
Please refer to Para 105 of Master Direction – Non-Banking Financial Company –
Housing Finance Company (Reserve Bank) Directions, 2021 wherein certain criteria
have been prescribed for notification of HFCs as ‘Financial Institution’ under Section
2(1)(m)(iv) of the SARFAESI Act.
2. In this connection, Government of India (GoI) has, vide its Gazette Notification No.
S.O. 2405(E) dated June 17, 2021 notified the HFCs registered under Section 29A(5)
of National Housing Bank Act, 1987 and having assets worth ₹100 crore & above, as
‘Financial Institution’ under Section 2(1)(m)(iv) of SARFAESI Act, 2002. In view of
revision of the criteria for notification as ‘Financial Institution’ as per the
abovementioned Gazette notification of GoI, the criteria prescribed under Para 105 of
the aforesaid Master Direction are withdrawn with immediate effect.
3. The Master Direction – Non-Banking Financial Company – Housing Finance
Company (Reserve Bank) Directions, 2021 is being modified accordingly.
Yours faithfully,
(J.P. Sharma)
Chief General Manager
िविनयमन िवभाग, क���य कायार्लय, 2री मंिजल, मख्ु य कायार्लय भवन, शह�द भगत �सहं माग र् फोटर्, मुंबई - 400 001
दरू ध्वनी:+91-22-22709038, ई-मेल:helpdnbr@rbi.org.in
Department of Regulation, Central Office, 2nd Floor, Main Office Building , Shahid Bhagat Singh Marg, Fort, Mumbai – 400 001
Tel No:+91-22-22709038, Email: helpdnbr@rbi.org.in
�हदं ी आसान ह,ै इसका �योग बढाईय े