The RBI has withdrawn the exemption granted to Housing Finance Institutions (HFIs) from the applicability of Chapter IIIB of the RBI Act 1934 pertaining to non-banking finance institutions/NBFCs receiving deposits , with the exception of Section 45-IA i.e. the requirement of registration and net owned fund. The Master Directions on exemptions from the provisions of the RBI Act has accordingly been updated.
Consequently, HFIs will be required to maintan a certain percentage of assets, create a reserve fund and the RBI will have the power inspect, regulate, give directions, collect information from the HFI with respect to its deposits etc. HFIs will be obliged to furnish statements and any other information required by the RBI. The RBI can also prohibit the acceptance of deposits and alienation of assets by the HFI and also file winding up petition if the continuance of the HFI is detrimental to the public interest.
To refer to the RBI notification dated 11 November 2019, click here
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