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Thursday, August 8, 2013

HFCs allowed to raise public deposits of up to 10 years

Housing finance companies (HFCs) have been allowed to raise public deposits with tenure of up to 10 years. Till now, these firms were permitted to raise public deposits with maximum tenure of seven years.

A decision to this effect was taken by the National Housing Bank (NHB), the regulator of housing finance companies.

With this decision, these companies can now get access to longer-term funds, R.V. Verma, NHB Chairman and Managing Director, told Business Line.

“This will help in better asset-liability management for HFCs, whose assets are growing. They also need to go in for longer-term lending and this move will help them do that,” Verma said.

Not all HFCs registered with NHB can raise public deposits – they need special approval from the regulator.

Currently, there are only 18 registered HFCs that are authorised to raise deposits from the public. The total outstanding public deposits for these 18 companies stood at about Rs 40,000 crore.

Since 2005, NHB has not granted fresh authorisation to any HFCs to mop up funds from the public.
Source: thehindubusinessline


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