The Reserve Bank on Wednesday proposed to double the minimum net owned fund (NOF) requirement for housing finance companies (HFCs) to Rs 20 crore and classification of such firms under its draft framework for these companies.
The step is aimed at strengthening the capital base mainly of small housing finance companies (HFC), the RBI said while releasing the proposed changes in the regulatory framework for HFCs. A new category of systematically important HFCs based on financial parameters and restrict lending by HFCs either to a construction company or flat buyers of that company have also been proposed in the draft framework. The RBI said that existing HFCs would be provided with a glide path to achieve minimum Net Owned Fund (NOF) of Rs 20 crore.
They will be required to reach Rs 15 crore within one year and Rs 20 crore within two years. “This step is aimed at strengthening the capital base, especially of smaller HFCs and companies proposing to seek registration under NHB Act,” the RBI said while inviting comments from stakeholders by July 15. Regarding the classification of HFCs, the RBI draft said that they would be split into systemically important and non-systemically important companies on the lines of NBFCs. At present, HFC regulations are common for all HFCs irrespective of their asset size and ownership, the draft said.