Key Points
The Reserve Bank of India is planning to make the deposit mobilisation rules more stringent for housing finance companies such as PNB Housing Finance or LIC Housing Finance in a bid to put them on the same regulatory platform as other non-banking finance companies..
In a draft regulatory framework, the central bank said HFCs without investment grade credit rating would not be allowed to raise public deposits or renew existing deposits..
The ceiling on the quantum of public deposits held by deposit taking HFCs, which comply with all prudential norms and minimum investment grade credit rating, will stand reduced from 3 times to 1.5 times of net owned funds...
With the change of ceiling on the quantum of public deposits to 1.5 times of net owned funds, HFCs holding deposits in excess of the revised limit would not be allowed to raise fresh public deposits or renew existing ones, RBI said..
"Existing deposits with maturities above sixty months shall be repaid as per their existing repayment profile," RBI said.. RBI has also placed new restrictions for deposit taking HFCS on their investments in unquoted shares and advised them to set board-approved internal limits for such investments..
