RBI’s Draft Circular

After the transfer of regulation of HFCs from the National Housing Bank (NHB), the RBI issued a revised regulatory framework for HFCs vide circular dated 22 October 2020 wherein it was stated that further harmonization between regulations of HFCs and NBFCs would be taken up in a phased manner.

In pursuit of this goal, the RBI has recently unveiled a draft circular on 15 January 2024, titled “Draft circular on Review of the regulatory framework for HFCs and harmonization of regulations applicable to HFCs and NBFCs” for public feedback. The primary objective of this circular is to rationalize the regulations governing HFCs and bring them into closer conformity with the regulatory framework applicable to NBFCs. The proposed modifications encompass aspects related to accepting deposits and other regulatory elements, with some changes universally applicable to all HFCs.