National Housing Bank
(Wholly Owned by the Reserve Bank of India )
New Delhi
HOUSING FINANCE COMPANIES (NHB) DIRECTIONS, 2001
Direction No. NHB.HFC.DIR. 17/CMD/2006 dated September 29, 2006
The National Housing Bank having considered it necessary in the public interest and being satisfied that, for the purpose of enabling the National Housing Bank to regulate the housing finance system in the country to its advantage, it is necessary so to do, hereby in exercise of the powers conferred on it by sections 30A and 31 of the National Housing Bank Act, 1987 (53 of 1987) and all the powers enabling it in this behalf, directs that the Housing Finance Companies (NHB) Directions, 2001 shall with immediate effect , be further amended in the following manner, namely:-
In paragraph 3 of the Housing Finance Companies (NHB) Directions, 2001, the following shall be substituted, viz.
“Restriction on acceptance of deposits
3 . (1) No housing finance company shall accept or renew public deposits unless the housing finance company has obtained minimum investment grade rating for its fixed deposits from any one of the approved rating agencies, at least once a year and a copy of the rating is sent to the National Housing Bank and it is complying with all the prudential norms, provided that:
(i) a housing finance company having obtained credit rating for its fixed deposits not below the minimum investment grade rating as above and complying with all the prudential norms, may accept public deposits not exceeding five times of its NOF.
(ii) a housing finance company which does not have the requisite rating for its fixed deposits shall obtain the same within a period of six months time from the date of notification or such extended period as may be permitted by the National Housing Bank, to obtain the prescribed rating for its fixed deposits.
Approved Credit Rating Agencies
The names of approved credit rating agencies for the time being are as follows:-
• The Credit Rating Information Services of India Ltd. (CRISIL)
• ICRA Ltd.
(c) Credit Analysis & Research Ltd.(CARE)
(d) FITCH Ratings India Private Ltd.
(2) No housing finance company shall have deposits inclusive of public deposits, the aggregate amount of which together with the amounts, if any, held by it which are referred in clauses (iii) to (vii) of sub-section (bb) of Section 45 I of the Reserve Bank of India Act, 1934 (2 of 1934) as also loans or other assistance from the National Housing Bank, is in excess of sixteen times of its NOF .
(3) Where a housing finance company holds as on the date of commencement of these directions public deposits in excess of the limits specified in (1) above and as applicable to it or deposits inclusive of the items mentioned in (2) above in excess of the limits specified in (2) above, it shall -
(i) not accept fresh deposit or open new deposit account; or
(ii) not renew the existing deposit or where the deposits are received under
any recurring scheme, receive instalments under such scheme after the expiry of the scheme period;
(iii) reduce such excess deposit by repayment on maturity.
(4) In the event of down gradation of the credit rating to any level below investment grade, the housing finance company shall
• report the position within fifteen working days to the National Housing Bank;
(ii) with immediate effect stop accepting fresh public deposit and
(iii) reduce such excess deposit by repayment on maturity.”
S. Sridhar Chairman & Managing Director
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