{"id":26618,"date":"2019-11-14T18:43:44","date_gmt":"2019-11-14T13:13:44","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=26618"},"modified":"2019-12-05T18:42:08","modified_gmt":"2019-12-05T13:12:08","slug":"rbi-withdraws-exemptions-from-housing-finance-companies","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/rbi-withdraws-exemptions-from-housing-finance-companies\/","title":{"rendered":"RBI Draws Out Certain Exemptions From Housing Finance Companies"},"content":{"rendered":"

RBI withdraws certain exemptions granted to Housing Finance Companies<\/strong><\/p>\n\n\n\n

HFCs will have to create a reserve fund like every NBFC<\/a><\/strong><\/p>\n\n\n\n

The Reserve Bank of India (RBI) has withdrawn\ncertain exemptions granted to Housing Finance Companies (HFCs). Currently, HFCs\nare exempted from the provisions of Chapter IIIB of Reserve Bank of India Act,\n1934. However, as per RBI’s notification, it has been decided to withdraw these\nexemptions, which puts the regulations of HFCs at par with Non-Banking\nFinancial Company (NBFCs).<\/p>\n\n\n\n

This decision came after the Finance Act, 2019\namended the National Housing Bank Act, 1987, which granted certain powers for\nregulations of HFCs with RBI.HFCs are currently exempt from the Chapter IIIB of\nRBI Act, 1934. However, it has been decided to withdraw these exemptions and\nmake the provisions of Chapter IIIB of Reserve Bank of India Act, 1934.<\/p>\n\n\n\n

Housing Finance Companies Current Situation<\/h2>\n\n\n\n

The Real Estate sector in India is proliferating. It\nis the second-largest sector in employment generation in India. Indian Housing\nFinance is no longer dependent solely on government-provided services like it\nused to be during the 1970s. The scenarios have changed now and this sector is\nbecoming more and competitive with every passing year. There are around 45\nhousing finance entities providing housing loans worth Rs 781,000 million to\nhomebuyers across the country.  <\/p>\n\n\n\n

India’s Finance Minister Nirmala Sitharaman in her\nmaiden budget speech in July had proposed an amendment<\/a> to Section- 45IA of the\nRBI Act, 1934 in the Finance Bill. Later on 13th<\/sup> August, RBI\nannounced that Housing Finance Companies would be treated as a category of\nnon-banks.<\/p>\n\n\n\n

Another exemption has been drawn out from HFCs which\nis in regard to the creation and maintenance of a reserve fund. After RBIs\nnotification, it has become mandatory for Housing Finance Companies (HFCs) to\ncreate a reserve fund like every NBFC. Housing finances have to transfer a minimum\nof 20% of its net profit every year to the reserve fund before any dividend is\ndeclared. <\/p>\n\n\n\n

Moreover, RBI from now on can inspect any HFC to\nverify the correctness and completeness of any statement provided to RBI. <\/p>\n\n\n\n

Housing Finance Companies are now barred from appropriating sum from the reserve fund unless there is a special direction from the Reserve Bank of India (RBI)<\/a>. These entities have to report such appropriations within 21 days, from the date of such withdrawal. <\/p>\n\n\n\n

Conclusion<\/h2>\n\n\n\n

After the withdrawal of certain exemptions granted to HFCs, these entities will be treated as one of the categories of  non- banking financial companies (NBFCs) for regulatory purposes. The Reserve Bank of India will carry out a review of the existing regulatory framework applicable to HFCs and come out with revised regulations in due course.<\/p>\n\n\n\n

Also Read: Housing Finance Company Registration<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

RBI withdraws certain exemptions granted to Housing Finance Companies HFCs will have to create a reserve fund like every NBFC The Reserve Bank of India (RBI) has withdrawn certain exemptions granted to Housing Finance Companies (HFCs). Currently, HFCs are exempted from the provisions of Chapter IIIB of Reserve Bank of India Act, 1934. However, as […]<\/p>\n","protected":false},"author":26,"featured_media":26619,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"acf":{"service_id":"113"},"yoast_head":"\nRBI draws out certain exemptions from HFC (Housing Finance Companies)<\/title>\n<meta name=\"description\" content=\"HFCs are exempted from the provisions of Chapter IIIB of RBI Act, 1934. Now RBI has decied to withdraw these exemptions from Housing Finance Companies\" \/>\n<meta name=\"robots\" content=\"index, follow\" \/>\n<meta name=\"googlebot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta name=\"bingbot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterslice.com\/learning\/rbi-withdraws-exemptions-from-housing-finance-companies\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"RBI draws out certain exemptions from HFC (Housing Finance Companies)\" \/>\n<meta property=\"og:description\" content=\"HFCs are exempted from the provisions of Chapter IIIB of RBI Act, 1934. Now RBI has decied to withdraw these exemptions from Housing Finance Companies\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterslice.com\/learning\/rbi-withdraws-exemptions-from-housing-finance-companies\/\" \/>\n<meta property=\"og:site_name\" content=\"Enterslice\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/enterslice\" \/>\n<meta property=\"article:published_time\" content=\"2019-11-14T13:13:44+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2019-12-05T13:12:08+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/11\/RBI-withdraws-certain-exemptions-from-HFCs.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"630\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:creator\" content=\"@enterslice\" \/>\n<meta name=\"twitter:site\" content=\"@enterslice\" \/>\n<!-- \/ Yoast SEO plugin. -->","authorName":"Shubham Chauhan","authorImageUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/10\/IMG_20191011_160437__01.jpg","authorDescription":"A passionate legal content writer, a nature enthusiast, an avid reader, and a part-time thinker. By means of conducting in-depth research on industry related topics, Shubham often builds flawless and intelligible legal content for populace from all walks of life.","postViews":474,"readingTime":2,"nextPost":{"id":26640,"slug":"business-exit-strategy-for-startups"},"prevPost":{"id":26585,"slug":"it-department-acknowledges-an-error-in-charging-late-itr-filing"},"featuredMediaUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/11\/RBI-withdraws-certain-exemptions-from-HFCs.jpg","postTerms":"Startup","_links":{"self":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/26618"}],"collection":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/users\/26"}],"replies":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/comments?post=26618"}],"version-history":[{"count":0,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/26618\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media\/26619"}],"wp:attachment":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media?parent=26618"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/categories?post=26618"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/tags?post=26618"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}