Notification as ‘Financial Institution’ under Section 2(1)(m)(iv) of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act)

Last updated: 26 August 2021

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Housing Finance Companies (HFCs) registered under the National Housing Bank Act and possessing assets of ₹100 crore or more have been officially notified as 'Financial Institutions' under the SARFAESI Act, 2002. This notification, issued by the Government of India, supersedes previous criteria set out in the Master Direction for Non-Banking Financial Company – Housing Finance Company (Reserve Bank) Directions, 2021. The Master Direction is being updated to reflect these changes.

RBI/2021-22/91
DOR.FIN.REC.No.41/03.10.136/2021-22

August 25, 2021

All Housing Finance Companies (HFCs)

Dear Sir/ Madam,

Notification as ‘Financial Institution’ under Section 2(1)(m)(iv) of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act)

Please refer to Para 105 of Master Direction – Non-Banking Financial Company – Housing Finance Company (Reserve Bank) Directions, 2021 wherein certain criteria have been prescribed for notification of HFCs as ‘Financial Institution’ under Section 2(1)(m)(iv) of the SARFAESI Act.

2. In this connection, Government of India (GoI) has, vide its Gazette Notification No. S.O. 2405(E) dated June 17, 2021 notified the HFCs registered under Section 29A(5) of National Housing Bank Act, 1987 and having assets worth ₹100 crore & above, as ‘Financial Institution’ under Section 2(1)(m)(iv) of SARFAESI Act, 2002. In view of revision of the criteria for notification as ‘Financial Institution’ as per the abovementioned Gazette notification of GoI, the criteria prescribed under Para 105 of the aforesaid Master Direction are withdrawn with immediate effect.

3. The Master Direction – Non-Banking Financial Company – Housing Finance Company (Reserve Bank) Directions, 2021 is being modified accordingly.

Yours faithfully,

(J.P. Sharma)
Chief General Manager

FAQ :

The notification officially designates Housing Finance Companies (HFCs) as 'Financial Institutions' under the SARFAESI Act, 2002.

HFCs registered under Section 29A(5) of the National Housing Bank Act, 1987, and having assets worth ₹100 crore and above are covered.

The SARFAESI Act, 2002 (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002) is an Indian legislation that allows banks and financial institutions to recover non-performing assets.

Previously, certain criteria were prescribed in Para 105 of the Master Direction – Non-Banking Financial Company – Housing Finance Company (Reserve Bank) Directions, 2021.

No, the criteria prescribed under Para 105 of the Master Direction are withdrawn with immediate effect due to the new Government of India notification.

The criteria prescribed under Para 105 of the Master Direction are withdrawn with immediate effect.

Guest

Notification No : RBI/2021-22/91 DOR.FIN.REC.No.41/03.10.136/2021-22
Published in Community & General
Source : https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12151&Mode=0

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