NHB declares to maintain a minimum percentage of liquid assets

Jun 04, 2019 | by Avantis RegTech Legal Research Team


The National Housing Bank (NHB) on May 25, 2019 declares that the Section 29B of National Housing Bank Act, 1987, which talks about the “maintenance of percentage of assets” shall not apply to housing finance companies, subject however that— 

(A) Every housing finance company accepting public deposits shall 

(1) invest and continue to invest in India in unencumbered approved securities, valued at a price not exceeding the current market price of such securities, an amount which, at the close of business on any day, shall not be less than six and a half per cent of the public deposits outstanding at the close of business on the last working day of the second preceding quarter. 

(2) maintain in India in an account with a scheduled bank in term deposits or certificate of deposits (free of charge or lien) or in deposits with the National Housing Bank or by way of subscription to the bonds issued by the National Housing Bank, or partly in such an account or in such deposit or partly by way of such subscription, a sum which, at the close of business on any day, together with the investment made under clause (1) shall not be less than thirteen per cent of the public deposits outstanding at the close of business on the last working day of the second preceding quarter

(B) All other provisions of Section 29B shall mutatis mutandis be applicable to the above requirement as if the expression “public deposit” is the same as the expression “deposit” as contemplated under the said provision.

[Notification No.NHB.HFC.LA-2/MD&CEO/2019]

Click here to download the Notification.

 


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