RBI requests Housing Finance Companies to uphold 15% of liquid assets for Public deposits

The Reserve Bank of India has declared changes on minimum percentage of liquid resources, which indicates that all deposit taking Housing finance companies - HFCs will keep up with liquid resources for the amount of 15% of the public deposits as against 13% at present.

Housing finance companies will make sure that asset cover is accessible for public deposits acknowledged by them consistently, and guarantee that they get the 'investment grade' rating by credit score agencies no less than one time per year, the national bank said in an explanation.

Home loan lenders "will not reestablish existing stores or acknowledge new agencies from that point till they get an investment grade assessment," it added.

Public deposits acknowledged or recharged by HFCs will be repayable following a time of a year or more yet not later than 60 months, it said.

It has also brought the regulations governing branches and the appointment of agents to collect deposits into line. Under these rules, HFCs that have branches or agents outside the state where they are registered cannot accept new deposits or renew existing deposits if they do not meet certain conditions.

Limitations on investments in unquoted shares applicable for NBFCs will likewise become applicable to HFCs, the RBI said, adding deposits taking HFCs will fix board-permitted internal limits independently inside the constraint of direct venture, for investments in unquoted portions of another organization which is certainly not an subsidiary or an organization in a similar group as HFC.

Reserve Bank of India (RBI) also stated that if a depositor requests a withdrawal citing an emergency, non-banking financial institutions (NBFIs) will reimburse the depositor in full within the first three months of accepting the funds.