The Reserve Bank of India (“RBI”), vide Notification No. DOR.FIN.REC. No.58/03.10.136/2024-25[1] dated January 29, 2025, issued the revised guidelines concerning the private placement of Non-Convertible Debentures (“NCDs”) by Housing Finance Companies (“HCFs”) with maturity period of more than 1 (one) year (“Circular”). The provisions laid down in this Circular shall be applicable to all fresh private placements of NCDs (with maturity more than one year) by HFCs immediately.
The key amendments provided under the Circular are as follows:
- Alignment with NBFC Guidelines:
The guidelines on private placement of NCDs by HFCs shall now follow the provisions under Paragraph 58 of the Master Direction – Non-Banking Financial Company – Scale Based Regulation (SBR) Directions, 2023, as amended from time to time. These provisions shall be applicable mutatis-mutandis to HFCs.
- Repeal of Previous Guidelines:
The existing guidelines under Chapter XI of the Master Direction – Non-Banking Financial Company – Housing Finance Company (Reserve Bank) Directions, 2021 stand repealed. The new guidelines, as mentioned above, shall supersede the previously applicable rules for private placement of NCDs by HFCs.
- Deleted Provisions:
To align with the amendments, Paragraphs 57 to 68(A) under Chapter XI of the Master Direction – Non-Banking Financial Company – Housing Finance Company (Reserve Bank) Directions, 2021, shall be deleted.
[1]https://website.rbi.org.in/web/rbi/-/notifications/private-placement-of-non-convertible-debentures-ncds-with-maturity-period-of-more-than-one-year-by-hfcs-review-of-guidelines