The Reserve Bank of India (RBI) has said that the housing finance companies (HFCs) across the country will be treated in a category of non-banks. The apex bank also said that a revised regulatory framework for these entities will be released soon.
The central bank made this move after the Finance Act,2019 amended the National Housing Bank Act, 1987, conferring certain powers for the regulation of HFCs to it.
“HFCs will henceforth be treated as one of the categories of non-banking financial companies (NBFCs) for regulatory purposes. Reserve Bank of India will carry out a review of the extant regulatory framework applicable to HFCs and come out with revised regulations in due course,” the RBI said.
However, till RBI issues a revised framework, HFCs will comply with the directives issued by National Housing Bank (NHB).
Moreover, the NHB will continue to carry out the supervision of HFCs and they will continue to submit various returns to NHB. The grievance redressal mechanism with regard to HFCs will also continue to be with the NHB.
The RBI said, “A housing finance institution, which is a company, desirous of making an application for registration under sub-section 2 of section 29A of the National Housing Bank Act, 1987 (as amended by Act 23 of 2019) may approach the Department of Non-Banking Regulation, Reserve Bank of India.”