The RBI has changed the rules to make them stricter for housing finance companies that collect deposits.
Now, these companies can only take deposits from people for a period of up to five years, whereas before it was ten years.
Shareholders have time until February 29th to provide their suggestions on this.
According to a recent circular from the RBI, housing finance companies (HFCs) might need to increase their total liquid assets, including approved securities, from 13% to 15% of public deposits by March 2025.
The RBI mentioned this in a circular on Monday. HFCs have to follow the same rules as other non-banking financial companies when it comes to accepting deposits.
Any deposits made now must be given back to customers within 60 months.
If the credit rating of an HFC is low, they won’t be allowed to take new deposits, and existing deposits won’t be renewed.
The RBI has had the authority to regulate HFCs since August 2019.
