RBI directs deposit taking HFCs to maintain 15% as liquid fund, raise deposits only up to 5 years
RBI) has prohibited housing finance companies (HFC) from raising public deposits for more than five years, placed a ceiling on the quantum of deposits they can raise, and asked them to increase the share of liquid assets to 15% from 13% now in a phased manner.
RBI on Monday said that public deposits accepting HFC can renew deposits after 12 months or more but not later than sixty months. It has allowed existing deposits with maturities above sixty months shall be repaid as per their existing repayment profile.
Separately, RBI has directed non-bank finance companies to put in place a mechanism to provide nomination facility for depositors irrespective of customers demanding the service.
RBI also said that NBFC can repay tiny deposits – not exceeding Rs 10,000- before expiry of three months in case the depositor demands it. In case of critical illness, the entire principal sum of deposit may be prematurely paid to individual depositors, on request, before the expiry of three months from the date of acceptance of such deposits, without interest.
The RBI’s latest Trend and Progress Report shows that as of March 2023 there are 97 HFC and 9480 NBFC as on September 2023. Of this, deposits taking HFC are 15 and NBFCs are 26.
RBI said the deposit taking HFC should also have an investment grade rating and if the rating falls below investments grade, HFC are barred from renewing existing deposits or accepting new deposits.
The RBI has also placed a ceiling on the quantum of public deposits to 1.5 times of net owned
