The Reserve Bank of India today released the draft circular on ‘Review of regulatory framework for HFCs and harmonisation of regulations applicable to HFCs and NBFCs’. Comments on the draft circular are invited from NBFCs (including HFCs) and other stakeholders by February 29, 2024.

Comments/ feedback, if any, on the draft circular may be forwarded to:

The Chief General Manager
Department of Regulation, Central Office
Reserve Bank of India
2nd Floor, Main Office Building
Shahid Bhagat Singh Marg, Fort
Mumbai – 400 001
or
by email

Background

Subsequent to transfer of regulation of HFCs from National Housing Bank (NHB), the Reserve Bank had issued revised regulatory framework for HFCs vide circular dated October 22, 2020 wherein it was stated that further harmonisation between regulations of HFCs and NBFCs will be taken up in a phased manner. In view of this, the Reserve Bank has undertaken a review and proposes to harmonise certain regulations of HFCs with those applicable to NBFCs viz., deposit directions for deposit taking HFCs, participation of HFCs in various derivative products for hedging purposes, diversification into other financial products, adoption of technical specifications by HFCs under Account Aggregator ecosystem, etc. The draft circular also proposes to review certain directions for deposit taking NBFCs. This exercise is part of further harmonisation of HFC regulations with NBFC regulations.

(Yogesh Dayal)     
Chief General Manager

Regulatory harmonisation of housing finance and NBFC rules proposed, aligning deposit, derivatives, product diversification, and data standards. The Reserve Bank of India issued a draft circular proposing regulatory harmonisation between HFCs and NBFCs, inviting stakeholder comments. The draft aligns deposit directions for deposit-taking HFCs with NBFC norms, permits HFC participation in derivatives for hedging, allows diversification into other financial products, and requires adoption of Account Aggregator technical specifications; it also proposes review of directions for deposit-taking NBFCs.