Reserve Bank of India (RBI) has revised the guidelines for Housing Finance Companies (HFCs) regarding the private placement of Non-Convertible Debentures (NCDs) with a maturity period of more than one year. Previously outlined in Chapter XI of the Master Direction – Non-Banking Financial Company – Housing Finance Company (Reserve Bank) Directions, 2021, the rules are now updated in line with the guidelines for Non-Banking Financial Companies (NBFCs) as stated in the Master Direction – Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) Directions, 2023. The new regulations, effective immediately, repeal the old guidelines and mandate that the revised rules apply to all new private placements of NCDs by HFCs. This update standardizes the treatment of private placement rules for both HFCs and NBFCs, ensuring consistency across the financial sector.
Reserve Bank of India
RBI/2024-25/107
DOR.FIN.REC.No.58/03.10.136/2024-25
January 29, 2025
All Housing Finance Companies (HFCs)
Dear Sir/ Madam,
Private Placement of Non-Convertible Debentures (NCDs) with maturity period of more than one year by HFCs – Review of guidelines
Please refer to Chapter XI of Master Direction – Non-Banking Financial Company – Housing Finance Company (Reserve Bank) Directions, 2021 wherein guidelines on private placement of NCDs by HFCs have been prescribed.
2. On a review, it has been decided that the Guidelines on Private Placement of NCDs (with maturity more than one year) by NBFCs, as contained in para 58 of the Master Direction – Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) Directions, 2023(as amended from time to time) shall be applicable, mutatis-mutandis, to HFCs. Accordingly, the existing guidelines under Chapter XI of Master Direction – Non-Banking Financial Company – Housing Finance Company (Reserve Bank) Directions, 2021 stand repealed. The revised guidelines shall be applicable to all fresh private placements of NCDs (with maturity more than one year) by HFCs from the date of this circular.
3. The Master Direction – Non-Banking Financial Company – Housing Finance Company (Reserve Bank) Directions, 2021 is being modified as detailed in Annex.
Yours faithfully,
(J.P. Sharma)
Chief General Manager
Annex to circular no.DOR.FIN.REC.No.58/03.10.136/2024-25 dated January 29, 2025
Annex
New paragraph
56A. The instructions regarding “Raising Money through Private Placement by NBFCs” as contained in para 58 of the Master Direction – Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) Directions, 2023 (as amended from time to time) shall be applicable, mutatis-mutandis, to HFCs.
Deleted Paragraphs
Paragraphs 57 to 68A under Chapter XI of Master Direction – Non-Banking Financial Company – Housing Finance Company (Reserve Bank) Directions, 2021 stand deleted.
