The Nationwide Housing Financial institution (NHB) has requested deposit-taking housing finance corporations (HFCs) to barely enhance their liquid property, stepping in as some sector gamers face a liquidity disaster.
The NHB, by means of a notification issued on Could 25, has requested HFCs to maintain 6.5 per cent of the general public deposits in debt-free securities, as a substitute of the 6-per cent restrict earlier.
HFCs should in hold 13 per cent as liquid assets–instead of 12.5 per cent earlier–with the remaining share of public deposits to be stored within the type of time period deposits or certificates of deposits or in bonds issued by the NHB.
“The transfer is aimed to hedge the danger of public deposits in these HFCs,” mentioned a finance ministry official. There are 18 HFCs accepting public deposits together with ICICI House Finance Firm Ltd, PNB Housing Finance Ltd., L&T Housing Finance Restricted, amongst others.
The NHB notification got here 4 days after cash-stripped Dewan Housing Finance Ltd (DHFL) introduced it has stopped accepting recent public deposits and renewal of current deposits. DHFL’s credit standing was downgraded final week after the corporate missed an curiosity fee deadline on a set of non-convertible debentures.
The NHB can also be taking a look at replicating the Reserve Financial institution of India’s latest round asking massive non-banking monetary corporations (NBFCs) to take care of a liquidity protection ratio (LCR) in step with banks and carry sufficient collateral that can be utilized for liquidity wants, ranging from April 1 subsequent yr.
“We’re taking a look at how we will concern a directive in step with the RBI’s round for the housing finance corporations,” the official mentioned.
The NHB has held a sequence of conferences lately to deliberate upon the methods to strengthen the regulatory norms for HFCs. Although the NHB will not be empowered to position its government on the board of HFCs,
Lately, NHB directed HFCs with asset measurement of greater than Rs 5,000 crore to nominate a chief threat officer (CRO) in a bid to enhance threat administration practices. The transfer adopted an analogous path given by the RBI for NBFCs.