“These HFCs are expected to submit a board-approved plan to the Reserve Bank within a period of three months, including a roadmap to meet the above-mentioned requirements and a schedule for transition,” read the final RBI guidelines.
The followings are the highlights of the Amendment made for HFC by RBI:
As per the RBI guidelines issues the word ‘providing finance for housing’ or ‘housing finance’ is not formally specified in past and hence they gave a formal definition of what housing finance means as follow:
- Loans to individuals or group of individuals including co-operative societies for construction/ purchase of new dwelling units.
- Loans to individuals for purchase of old dwelling units.
- Loans to individuals for purchasing old/ new dwelling units by mortgaging existing dwelling units.
- Loans to individuals for purchase of plots for construction of residential dwelling units provided a declaration is obtained from the borrower that he intends to construct a house on the plot within a period of three years from the date of availing of the loan.
- Loans to individuals for renovation/ reconstruction of existing dwelling units.
- Lending to public agencies including state housing boards for construction of residential dwelling units.
- Loans to corporates/ Government agencies (through loans for employee housing).
- Loans for construction of educational, health, social, cultural, or other institutions/centres, which are part of housing project in the same complex and which are necessary for the development of settlements or townships;
- Loans for construction of houses and related infrastructure within the same area, meant for improving the conditions in slum areas for which credit may be extended directly to the slum-dwellers on the guarantee of the central Government, or indirectly to them through the State Governments;
- Loans given for slum improvement schemes to be implemented by Slum Clearance Boards and other public agencies;
- Lending to builders for construction of residential dwelling units.
All other loans, including those for furnishing residential units, loans to mortgage property for any reason other than the purchase / building of a new residential unit / s or the renovation of an existing residential unit / s as defined above, shall be treated as non-housing loans and shall not come under the scope of housing finance.
