The Reserve Bank of India has withdrawn, with immediate effect the facility of Short Term Currency Borrowings to housing finance companies. The decision has been taken after a review of the prevailing macroeconomic condition and improvements in domestic credit and liquidity conditions.

The Reserve Bank had earlier, as a temporary measure allowed Housing Finance Companies registered with NHB, on November 17, 2008 to raise short term foreign currency borrowing under approval route subject to certain terms and conditions. The Press Release issued by RBI in this regard reads as following:

The Reserve Bank of India has withdrawn, with immediate effect, the facility of short-term foreign currency borrowings provided to Non-Banking Finance Companies-Non-Deposit Taking-Systemically Important (NBFC-ND-SI) and the Housing Finance Companies (HFCs). The decision has been taken after a review of the prevailing macroeconomic conditions and improvements in the domestic credit and liquidity conditions.

Press Release : 2009-2010/1076 Deputy General Manager