NHB releases the certificate of Adverse Balance Release

Dec 16, 2019 | by Avantis RegTech Legal Research Team


Industry Specific Compliance

The National Housing Bank (NHB) on December 09, 2019, has revised the existing NHB-HFC-05 to be submitted by the Housing Finance Companies (HFCs) on half-yearly basis. The HFCs availing refinance from NHB are required to furnish a Statutory Auditors’ certificate within a period of 60 days as at September 30 and March 31 every year confirming that NHB does not exceed the total outstanding housing loans. On occurrence of adverse balance, HFCs are required to deposit the adverse balance amount, as per instruction of NHB.

NHB has revised the existing NHB-HFC-05 to capture account-wise adverse balance amount as per the sanction terms for better monitoring of the book debts tagged to NHB. The Statutory auditors shall certify the loans tagged to the Bank for refinance and free of any charge and have not sold or securitized. The certificate shall also include that all loans flagged or tagged to NHB are standard and the days past due (DPD) is not more than 30 days.

NHB has introduced a new return NHB-HFC-10 titled Quarterly Certificate of Adverse Balance to capture account-wise adverse balance amount and to ensure complete asset coverage of refinance availed from NHB, to be submitted on a quarterly basis, within 7 days after the end of the quarter, duly certified by the Managing Director and CFO of the HFC. The Quarterly Certificate of Adverse Balance shall state that all loans flagged to NHB are standard and the DPD is not more than 30 days. The adverse balance shall be paid by respective HFC to NHB along with the said certificate confirming that the amount under the adverse balance has been remitted by the HFC. While computing adverse balance, book debts flagged for the purpose of collateral security or additional margin requirements are also to be counted for computing the sum aggregate of all outstanding housing loans in respect of each refinance account.

The HFCs are advised to remit the adverse balance amount on quarterly basis, positively within 7 days after the end of the quarter. The soft copy of the filled-in returns along with other electronic attachment files to the dedicated email id [email protected] and the printed copy of the workbooks (forms or returns), after affixing signature and seal need to be sent to the Refinance Operations Department, NHB, 4th floor, Core 5A, India Habitat Centre, Lodhi Road, New Delhi-110003.

[NHB(ND)/ROD/HFC/CIRC-02/2019-20]


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