- These changes are made with an aim to increase the efficiency of HFCs and address their issues related to liquidity and double financing.
- In this regard, RBI has revised regulatory framework for HFCs under which minimum Net Owned Funds (NOF) size for HFCs is fixed to Rs 20 crore.
- As per this, HFC having CoR (Certificate of Registration) and having NOF less than Rs 20 crore will be required to achieve NOF of Rs 15 crore by 31st March 2022 and Rs 20 crore by 31st March 2023.
- Also, it would be mandatory upon such HFCs whose NOF is currently below Rs 20 crore to submit a statutory auditor’s certificate to RBI within a month evidencing compliance with the prescribed levels.
- HFCs not fulfilling the prescribed level within the stipulated amount of time will not be eligible to hold CoR.
- Also, HFCs will not impose foreclosure charges or pre-payment penalties on any floating rate term loan sanctioned for purposes other than business to individual borrowers, with or without co-obligates.
- HFCs lending against the collateral of listed shares will have to maintain an LTV (Loan to Value) ratio of 50% for loans granted against the collateral of shares.
- HFCs will be mandated to maintain the LTV ratio not more than 75% for loans granted against the collateral of gold jewellery.
- Static Part:
- HQ of RBI: Mumbai
- Governor of RBI: Shaktikanta Das
Question:
Q.1 RBI has revised regulatory framework for HFCs under which minimum Net Owned Funds (NOF) size for HFCs is fixed to Rs _____?
a. Rs 30 crore
b. Rs 35 crore
c. Rs 20 crore
d. Rs 25 crore
a. Rs 30 crore
b. Rs 35 crore
c. Rs 20 crore
d. Rs 25 crore
