National Housing Bank Act amended to bring housing finance companies (HFCs) under RBI

The National Housing Bank Act has been amended thereby bringing housing finance companies (HFCs) under the ambit of the Reserve Bank of India.

The implementation of the partial credit guarantee scheme to public sector banks for buying high-rated pool assets of financially sound Non-Banking Financial Companies (NBFCs) is now operational. With the amendment, RBI is empowered to supersede the board of NBFCs (other than those owned by the government) and enable resolution of financially troubled NBFCs through merger or splitting them.

Till the time RBI issues a revised framework, HFCs shall continue to comply with the directions issued by the National Housing Bank.

The RBI said that “NHB will continue to carry out supervision of HFCs and HFCs will continue to submit various returns to NHB as it used to previously. The grievance redressal mechanism with regard to HFCs will also continue to be with the NHB.”