RBI to replace NHB rules with its own set as the new HFC regulator

Central bank sets a formal definition of 'housing finance' in draft released on its website

As the new regulator of housing finance companies (HFCs), the Reserve Bank of India (RBI) on Wednesday proposed to modify the rules governing these firms.

The RBI took over the powers to regulate HFCs from the National Housing Bank (NHB) in August 2019.

In the NHB regulations, according to the RBI, there was no formal definition of ‘housing finance’. In a draft released on its website, the central bank set a formal definition for the same.

Housing finance would now mean “financing, for purchase/ construction/ reconstruction/ renovation/ repairs of residential dwelling unit ...” for a whole host of functions that