Sep 30, 2021

Notification of Housing Finance Companies as Financial Institution under SARFAESI Act

The Government of India on June 17, 2021 notified Housing Finance Companies (‘HFCs’) registered under the National Housing Bank Act, 1987 (‘NHB Act’) and having assets worth ₹ 1 billion (approx. US$ 13.57 million) and above, as ‘financial institutions’ under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (‘SARFAESI’).

Prior to this Notification, for an HFC to get notified as a ‘financial institution’ under SARFAESI and thereby use the benefits of SARFAESI, an application had to be made to the National Housing Bank apart from certain conditions being satisfied and additional compliances being met, as set out under the Master Direction – Non-Banking Financial Company – Housing Finance Company (Reserve Bank) Directions, 2021. The RBI has, by its Circular dated August 25, 2021, withdrawn these requirements.




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