Special Window Fund for Affordable Real Estate Segment: Achche Din for Home-buyers?

– Sikha Bansal and Priya Udita

(finserv@vinodkothari.com)

Relief has come to the builders of stalled housing project and distressed homebuyers in in the form of establishment of a ‘Special Window‘ fund by the Government to provide priority debt financing for the completion of stalled housing projects that are in the affordable and middle-income housing sector. See the press release here. The announcement came after this package was introduced on September 14 by the Finance Minister. The Government has also issued FAQs on the same, which can be viewed here.

The write-up discusses salient features of the plan.

KEY FEATURES OF THE FUND

  1. Fund will be set up as Category II-AIF (Alternative Investment Fund) with initial amount of Rs. 25,000 crores and registered with SEBI.
  2. The government acting as a sponsor shall infuse Rs. 10,000 crore and the remaining amount to be contributed by State Bank of India, Life Insurance Corporation of India and other institutions.
  3. Investors can be Government and other private investors including cash-rich financial institutions, sovereign wealth funds, public and private banks, domestic pension and provident funds, global pension funds and other institutional investors.
  4. The SBICAP Ventures Limited is proposed to the Investment Manager.
  5. Project declared as non-performing assets (NPAs) or which have been dragged to the NCLT for insolvency proceedings will be included. Apart from that any projects undergoing corporate insolvency resolution process before the NCLT will be considered for funding through the Special Window upto the stage where the resolution plan for such insolvency resolution process has not been approved / rejected by the committee of creditors. However, cases pending in the High Courts or Supreme Court will not be considered.
  6. The retail loans of the selected stalled projects will be restructured as per RBI Guidelines and bank board approved policies.
  7. The investments will be in the form of non-convertible debentures subject to legal, regulatory or other considerations.

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An analysis of the Model Tenancy Act, 2019

1.      Introduction

In India, every state has its own law on tenancy matters. The matters, which are not covered by state legislations are governed by the Transfer of Property Act, 1882 (“TPA”), which is central legislation dealing with the matters between tenants and landlords. However, it covers transaction between tenant and landowner in the form of a lease. Codified legislation dealing exclusively on rent related matters in the real estate market has been long ignored in India. Lack of an exclusive legal framework hampered the growth of rental housing segment and resulted in low investments in the rental housing sector. The draft Model Tenancy Act, 2015 was an effort made earlier to codify the law on tenancy. but majority of states never implemented the same. In Union Budget 2019, it was proposed that in order to promote rental housing, new tenancy laws will be formulated to remove the archaic laws currently in use. In furtherance to the said proposition, Ministry of Housing and Urban Affairs (MHUA) released the draft Model Tenancy Act, 2019 (“MTA”) on July 10, 2019, which aims to regulate rental housing by a market-oriented approach while balancing interests of landowner and tenant at the same time. The article points out current problems of rental housing in India along with the issue that how MTA is going to compensate for these problems. It also presents an overview of MTA and loopholes present in it.

2.      Need for rental housing

Housing is one of the basic necessities of life. The rapid pace of urbanization in India has resulted in severe shortage of housing. People go for rental housing because  low-income or people are not ready to build their own house.In spite of government’s prime consideration to affordable housing, many poor households live in congested conditions, which indicates that housing is unaffordable for a large section of population, be it ownership or rental.

The Draft National Urban Rental Housing Policy, 2015 (“the Policy”) pointed out that there is a huge housing shortage in urban areas and on the other hand, there are massive stocks of vacant houses.[1]Possible reasons ascertained for vacant houses could be  low rental yield, fear of repossession, lack of incentives etc. The Policy defines rental housing as a property occupied by someone other than the owner, for which the tenant pays a periodic mutually agreed rent to the owner.[2] The policy suggested that if these vacant houses are made available for rental housing, then some, if not most of the urban housing shortage, could be addressed.[3] Hence, the need for rental housing can be understoodunder the following heads-

  1. An alternative to eliminate the problem of housing shortage in view of ever-increasing population of India.
  2. Prevention of future growth of slums by providing affordable housing to all.
  3. Rental housing could be turned as a steady source of income for the landlords, making investment in rental market attractive.

3.      Current problems of rental housing in India

Rental housing is a subject on which States have exclusive right to legislate. It is a state subject as mentioned under item 18 in List II of Seventh Schedule of the Constitution of India. Although, Central Government can guide the states as we have a quasi-federal structure in India, therefore, Central Government has power to make model law on rent control or tenancy.

At present, nearly every state has its own law governing matters relating to rental housing in their jurisdiction in the name of Rent Control Laws. However, these rent control laws are not adequate to satisfy the need for rental housing in true sense. Because, issues, such as lack of affordable housing, lack of investment in rental housing etc., are still present in the country.

The problems of rental housing in India, as present under different existing rent control laws, can be encapsulated as follow:

  1. Fixation of standard rent:

Existing rent control laws provide for standard rent or fair rent, which is calculated on the basis of cost of construction involved, when the premise was built and does not include present market value of the premise as a consideration to determine standard rent. This proves to be major disincentive for landlords and investors, who want to invest in rental market as it will give very low rate of return.

  1. Overstaying problem of tenants:

Existing rent control laws do not provide for any remedy for when tenants do not vacant the rent premises even after termination of the tenancy period. Therefore, landlords often fear that they might lose control on their premises and had to go long litigation process for recovering their premises.

  1. Reduced liquidity for landlords:

Freeze of availability of rental housing is evident in light of the long litigation proceedings relating to recovery of rental premises by the landlord or proceedings relating to eviction of tenants. When the proceedings are undergoing, it is difficult to rent out the premises which are lis pendens in court of law and thereby it reduces liquidity for landlords in the market.

  1. Security deposit:

From the point of view of tenants, it is unfair to give limitless amount to the landlords in the name of security deposit or pugree. Existing rent control laws do not provide for any upper cap as far as security deposit is concerned and tenants have to suffer in the hands of landlords, who demand lump sum amount as much as they want at the beginning of tenancy period. Because of this practice, poor households choose to live in slum areas as they cannot afford to give arbitrary amount of security deposit, which leads to lack of affordable housing in the Country.

  1. Landlord’s right to evict the tenant on false grounds:

It has been seen in many cases that landlords file false cases to evict tenants on the ground of non-payment of rent because most of the existing rent control laws do no mandate receipt of rent to be given by the landlord.

  1. Lease under Transfer of Property Act, 1882:

Section 105 of the aforesaid Act defines lease as “a lease of immoveable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms. The transferor is called the lessor, the transferee is called the lessee, the price is called the premium, and the money, share, service or other thing to be so rendered is called the rent.” It is to be noted that in case of a lease agreement, terms of the same cannot be changed until the expiry of the lease period unlike tenancy agreement. In practice, landlords often opt for tenancy agreement under rent control laws where they can execute tenancy on a month-to-month basis and can alter its terms.. However, in areas with high vacancy rate of rental premises, landlords choose for lease agreement under Section 105 and thereby make the use of rent control laws fatal. In addition, TPA and rent control laws do not mandate a written agreement to be executed, which is another problem to enforce the rights of either party to the oral agreement and leads to never-ending litigation proceedings in case of disputes.

  1. Leave and License Contract:

Apart from rent control laws and lease under the TPA, people often use leave and license contract as given under the Indian Easements Act, 1882. Section 52 of the said Act defines license as- “where one person grants to another, or to a definite number of other persons, a right to do, or continue to do, in or upon the immovable property of the grantor, something which would, in the absence of such right, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a license.” Hence, the licensor gives the license to the licensee to use the property, which includes usage same as applicable to rental market without transferring a specific interest in the immovable property. Thus, to execute a landlord-tenant relationship, there exist different contracts under the different names and different procedures, the ambiguities of which can be used by the landlord or tenant to influence the law as per their needs.

4.      Overview of MTA

MTA has been drafted with a view to balance the interests of the landowner and tenant and to provide for speedy dispute redressal by establishing adjudicatory bodies under MTA. It also tries to create an accountable and transparent environment for renting the premises and promotes sustainable ecosystem to various segments of society including migrants, professionals, workers, students and urban poor. To understand what MTA proposes for tenants and landlords, a brief overview has been presented here under the following heads-

4.1       Institutional framework – regulatory and judicial bodies-

Rent Authority-

Section 29 of MTA provides for the appointment of Rent Authority to be an officer who is

not below the rank of Deputy Collector. Rent Authority exercises same power as vested in Rent Court in the following matters-

  1. Upload details of tenancy agreement on a digital platform in the local vernacular or state language in the form prescribed and provide a unique identification number to the parties[4];
  2. Fix or revise the rent on an application by the landowner or tenant[5];
  3. Investigate the case and pass an order in case of deposit of rent by the tenant with the rent authority, if the landowner does not accept the rent[6];
  4. Allow the tenant, if requested, to vacate the premises if it becomes uninhabitable in absence of repairs by the landlord.[7]
  5. Conduct an inquiry and allow compensation or levy penalty in case of an application made to it by the landlord or tenant if any person cuts-off or withholds any essential supply or service in the premises occupied by the tenant or the landowner.[8]

Rent Court and Rent Tribunal-

Section 32 and 33 provides for the constitution of Rent Court and Rent Tribunal respectively. Section 34 gives exclusive jurisdiction to Rent Court and Rent Authority to hear and decide the applications relating to disputes between landowner and tenant and matters connected with and ancillary thereto. For speedy disposal of cases, Rent Court or Rent Tribunal has to dispose the case within 60 days from the date of receipt of the application or appeal and shall record the reasons in writing in case of disposal of case exceeds 60 days period.[9]Appeal from the orders of the Rent Court lies to the Rent Tribunal.[10] In addition, order of Rent Court or Rent Tribunal shall be executable by as a decree of a civil court.[11]Following reliefs can be given by the Rent Court[12]:

  1. Delivery of possession of the premises to the party in whose favor the decision is made;
  2. Attachment of bank account of the losing party for the satisfaction of the amount to be paid;
  3. Appoint any advocate or any other competent person including officers of the Rent Court or local administration or local body for the execution of the order.

4.2       Scope of coverage-

MTA applies to any premises, which is, let separately for residence or commercial or educational use except industrial use.[13] However, MTA does not provide what constitutes residence/commercial/educational/industrial use. Besides, MTA does not apply to the following premises[14]

  1. Hotel, lodging house, dharamshala or inn etc.;[15]
  2. Premises owned or promoted by-
    1. The Central/ State/ UT Government, or
    2. Local Authority, or
    3. Government undertaking or enterprise, or
    4. Statutory body, or
    5. Cantonment board;
  3. Premises owned by a company, university or organization given on rent to its employees as part of service contract;
  4. Premises owned by owned by religious or charitable institutions as may be specified by notification;
  5. Premises owned by owned by any trust registered under the Public Trust Act of the State;
  6. Premises owned by owned by Wakfs registered under the Wakf Act, 1995;
  7. Any other building specifically exempted in public interest through notification.

However, if the owner of any of the premises mentioned under in (b) to (g) wishes a tenancy agreement to be regulated under MTA, then he can inform the same to the Rent Authority.

4.3       Protection of landlord-

As stated above the prime object of the MTA is to eliminate the fear among landlords regarding repossession of their premises and increase the growth of investment in rental sector of the market. Keeping this view, MTA proposes to give protection to landlord in following manner-

  1. Subletting of rented premises cannot be effected without prior consent of landlord in
  2. writing along with disclosure of all details of sub-letting to landlord by the tenant. .[16]
  3. Landlord is allowed to make deduction from security deposit amount for any liability of the tenant.[17]
  4. Landlord is allowed to deduct the amount from the security deposit or can ask the amount payable from the tenant, in case the tenant refuses to carry out scheduled or agreed repairs in the premises.[18]
  5. Landlord can file an application to the Rent Authority against the tenant in case of cut-off or withhold of any essential supply or service in the premises by the tenant.[19]
  6. Landlord can evict the tenant on an application made to the Rent Court on any of the grounds mentioned under Section 21. These grounds are-
  7. Failure of agreement on rent payable;
  8. Failure of tenant to pay the arrears of rent in full and other charges payable unless the payment of the same within 1 month of notice being served on the tenant;
  9. Tenant has parted with the possession of whole or any part of the premises without obtaining the written consent of the landlord;
  10. Tenant has continued misuse of the premises even after receipt of notice from the landowner to stop such misuse;
  11. The premises are required by the landlord for carrying out any repairs, additions, alterations etc., which cannot be carried out without the premises being vacated unless re-entry of tenant has been pre-agreed between the parties;
  12. The premises or any part thereof are required by the landlord for carrying out any repairs, additions, alterations etc. for change of its use as a consequence of change of land use by the competent authority;
  13. Tenant has given written notice to vacate the premises and in consequence of that notice, the landlord has contracted to sell the accommodation or has taken any other step, as a result of which his interests would seriously suffer if he is not put in possession of that accommodation.
  14. In case of overstay of the tenant beyond tenancy period, the landlord is entitled to get compensation of double of the monthly rent for 2 months and 4 times of the monthly rent.[20]
  15. Landlord can make any construction or improvement to the rented premises after permission of the Rent Court obtained in this behalf.[21]
  16. Landlord is allowed to fix or revise the rent payable by the tenant, provided the same should be agreed by the tenant in the tenancy agreement.[22]

4.4       Protection of tenant-

MTA has not only given protection to landlords but balances the interests of the tenants as well. With this view, MTA proposes to give protection to landlord in the following manner-

  1. In the event of death of the tenant, his/her successors will have the same rights and obligations as agreed in tenancy agreement for the remaining period of the tenancy.[23]
  2. Rent cannot be increased during the tenancy period, unless the amount of increase or method for increase is expressly set out in the Tenancy Agreement.[24]
  3. Tenant is entitled to get refund of the security deposit amount at the time of vacating the premises after deduction of amount of liability, if any.[25]
  4. Tenant is entitled to get a written acknowledgment rent receipt by the landlord.[26]
  5. Where the landlord refuses to accept the rent, tenant may deposit it with the Rent Authority.[27]
  6. Tenant is allowed to deduct the amount from periodic rent, in case the landlord refuses to carry out the scheduled or agreed repairs in the premises.[28]
  7. Where the premises becomes uninhabitable and landlord refuses for repairs, thenthetenant has the right to vacate the premises after giving 15 days notice in writing to the landlord or with the permission of the Rent Authority, in case the.[29]
  8. Tenant can file an application to the Rent Authority against the landlord in case of cut-off or withhold of any essential supply or service in the premises by the landlord.[30]
  9. Tenant is entitled to get refund of such an advance amount and interest, in case of default, after deduction of rent and other charges in case of eviction proceedings initiated by the landlord under Section 21.[31]
  10. Tenant may give up possession of the premises on giving a one-month prior notice or notice as required under the tenancy agreement to the landlord.[32]

5.      How will the MTA help rental housing issue?

MTA recommends eradicating the existing rental housing problems by incorporating needful provisions. MTA has recognized the problems in existing rent control laws in its preamble as lack of growth of rental housing segment and lack of the landlords renting out their vacant premises. For better understanding of these needful provisions in MTA, a comparison of key provisions of existing rent control laws and MTA has been produced in Annexure A. In conclusion, the table suggests that MTA provides for market-oriented approach by leaving the fixation of rent amount on parties[33], who may fix or revise it considering current market value of the premises and thereby increasing the possibilities of high rate of return to the investors in the rental housing market. On the other hand, to remove the fear of the landlords of losing possession of the premises has been taken care by MTA by giving a remedy in form of compensation to the landlord[34].

6.      What do the state governments have to do?

As mentioned above, housing is a state subject and States have exclusive right to legislate upon it. MTA proposes only a model on how the issues relating to rental housing as existed under current laws relating to tenancy can be eliminated. It is completely on the states to adopt or not adopt MTA in their state. For better functioning of the rental housing in the state and to resolve the issues as point out above, state should adopt MTA. Moreover, States are free to make amendments in the proposed provisions in MTA while incorporating the same in their states.[35]

7.      What incentives will the state governments have for enacting the MTA?

MTA only proposes a model and States are under no obligation to enact MTA in their respective jurisdictions. Therefore, what the states will get for enacting MTA is equally an important question to consider. Section 46 of MTA provides that if any difficulty arises in giving effect to the provisions MTA, the State/UT Government may, by order, not inconsistent with the provisions MTA, remove the difficulty. Hence, any State enacting MTA is empowered to remove difficulty or amend the provision in their jurisdiction, if there arises any difficulty in implementation of the MTA.

Moreover, housing is one of the basic needs of life and raising the standard of living of its people is one of the primary duties of State as enshrined under the Article 47 of the Constitution of India. Therefore, States shall make every endeavor to resolve the issue of affordable housing in the best manner possible and MTA serves this objective well.

8.      Drawbacks of the MTA

Despite all the good attempts made in the provisions of MTA to remove the current problems relating to rental housing, MTA shortfalls on following grounds:

  1. Moreover, the term ‘Landlord’ covers ‘Lessor’ and the term ‘Tenant’ covers ‘Lessee’ in its definitions, but the MTA nowhere provides that it will override the provisions relating to Lease under the Transfer of Property Act, 1882. Therefore, usage of the term lessor/lessee would create conflict in practice since application of the Transfer of Property Act, 1882 is not clarified under the MTA .
  2. Lodging house and hotels are kept outside the scope of MTA. Therefore, application of the MTA to premises providing paying guest facilities is not clear.
  3. MTA provides for prospective application and gives no redress to tenancies, which are already in existence, prior to the commencement of MTA. Hence, position regarding existing tenancies is left untouched.
  4. Successor-in-interest has not been included in the definition of the term ‘tenant’ under Section 2 (m) of the MTA. However, Section 6 provides for successors of the tenant to come into the shoes of tenant in case of his/her death. This provision creates anomaly that after death of tenant, his/her successor-in-interest may deny acceptance of tenancy agreement on the ground that he/she is not covered within the definition of the term ‘tenant’.
  5. The term ‘rent’ is not defined under the Act, because of which, the form of rent payable is not clear, i.e. whether it has to be necessarily in cash or kind or crops or services rendered.
  6. The MTA does not address the situation in case of failure to execute tenancy agreement, failure to obtain consent of landowner for subletting, failure to refund security deposit at the time of taking over vacant possession of the premises by the landlord, failure to observe obligations imposed on parties. Although specific establishment of adjudicatory bodies has been provided under the MTA but the same results in increase of litigation matters before judicial bodies established under the MTA.
  7. MTA is open to be adopted by the States and does not necessarily impose application of its provisions to State.
  8. MTAdoes not talk about weak bargaining power of tenants and allows parties to agree on rent amount, which may cause prejudice to weaker sections of the society.
  9. MTA does not talk about over-riding effect of MTA on existing laws on tenancy, lease under the TPA, license under the Indian Easements Act, 1882 to uphold the objectives of the MTA.

9.      Conclusion

MTA is a welcoming step in rental matters relating to any premises. Establishment of the adjudicating authorities is going to lessen the burden on lower courts in the country in the matters relating to tenancy. However, application of the MTA would be interesting to see as to how many states actually implement MTA because it is only a model and not mandatory for states to adopt it.

 

 

Annexure-A

Comparison of Existing Rent Control Laws and MTA:

The author has tried to analyze some of the major existing rent control laws[36]in comparison with the MTA. The same has reproduced in a table form below:

Point of difference Existing Laws MTA Comments
Purpose of the Act 1.      Control of rent and protection of tenant from payment of rent more than the standard rent, and

2.      Protection of tenants from eviction,

 

It provides not only for protection of tenants but also provides for protection of landowners. Most of the existing rent control laws are tenant-centric; whereas MTA balances the interests of landowner and tenant.
Exemption  Premises belonging to the Government are exempted but no specific provision is present regarding exemption of religious or charitable premises and premises owned by a university except Maharashtra Rent Control Act, 1999.[37] MTA exempts any premises owned by the Government, religious or charitable institutions, and premises owned by a company, university or organization given on rent to its employees as part of service contract.[38] MTA applies to all kind of government occupied premises and publicly used premises unlike existing rent control laws.

 

Definition of ‘Landlord’ If the premises were let to a tenant then landlord means a person who-

1.      is receiving, or is entitled to receive the rent of any premises, or

2.      trustee, guardian or receiver, who is receiving or is entitled to receive rent, on behalf of, or for the benefit of, any other person who cannot enter into a contract (such as minor, person with unsound mind etc.).

 

If the premises were let to a tenant then landlord (Landowner/Lessor) means a person who[39]

1.      is receiving, or is entitled to receivethe rent of any premises,and

2.      includes successor-in-interest,

3.      trustee, guardian or receiver, who is receiving or is entitled to receive rent, on behalf of, or for the benefit of, any other person who cannot enter into a contract (such as minor, person with unsound mind etc.).

MTA covers Lessor within the term ‘Landlord’ and includes successor-in-interest unlike existing rent control laws.

 

Definition of ‘Premises’ Premises mean any building or part of a building rented out, and includes-

1.      Gardens, garages or outhouses, any furnituresupplied by the landlord,

2.      any fittings affixedto such building.

However, premises do not include hotel, lodging house.

 

 

Premises mean any building or part of a itrented out for the purpose of residence or commercial or educational use, (except for industrial use) and includes[40]

1.      the garden, garage or closed parking area, grounds and out-houses, appertaining to such building or part of the building,

2.      any fitting to such building or part of the building for the more beneficial enjoyment thereof,

However, premises do not include hotel, lodging house, dharamshala or inn etc.[41]

State RCAs do not explicitly exclude industrial use, unlike MTA and do not specifically recognize a particular purpose of use of building to be cover within the term ‘premises’.
Definition of ‘Tenant’ Some of the rent control laws do not provide definition of term ‘tenant’. And others include tenant as a person-

1.      who is paying the rent, or

2.      deemed tenant, or

3.      sub-tenant,

4.      member of tenant’s family in case of death of tenant.

Tenant/Lesseemeans a person[42]

1.      by whom the rent is payable, or

2.      on whose behalf the rent is payable, and

3.      includes a sub-tenant,and

4.      any person continuing in possession after the termination of his tenancy whether before or after the commencement of this Act.

However, tenant does not include any person against whom any order or decree for eviction has made.

MTA does not include successor-in-interest within the definition of tenant.
Standard rent Standard rent means a rent fixed by the Controller under rent control laws. No provision is made. MTA does not provide for the definition of the term ‘rent’.
Tenancy agreement It was not necessary and tenancy can be affected even without entering into tenancy agreement. It means a written agreement executed by the landowner and the tenant.[43] Moreover, it is mandatorycondition for a tenancy to come into effect.[44] MTA making the tenancy agreement mandatory unlike existing rent control laws.
Sub-letting No provision regarding prior written consent of landlord for sub-letting by tenant. Prior written consent of the landowner is madecompulsory.[45] More stringent provision.
Fixation of rent Rent fixed (standard rent) based on the value of land andcost of construction when built. The rent is the amount agreed between the landowner and the tenant as per the terms of the tenancy agreement.[46] Standard rent or fair rent concept has removed in MTA.
Increase in rent It is unilateral by the landlord with the approval of the controller. Revision of rent between the landowner and the tenant shall be as per the terms set out in the Tenancy Agreementor on a prior 3 months notice to the tenant.[47] Mutually agreed increase in rent is provided under MTA unlike rent control laws.
Temporary recovery of possession The landlord is entitled to get possession of the building, if bona fide, it is required by him to carry out repairs, alterations or additions, which cannot be carried out without the building being vacated, after which the building will again be offered to the tenant.

 

Rent Court may on an application made to it, make the order that the landlord is entitled to get possession of the premises or any part thereof on account of any repairs or rebuilding or additions or alterations or demolition, which cannot be carried out without the premises being vacated, provided that such re-possession has to be mutually agreed to between the landowner and the tenant and the new tenancy agreement has to submitted with the Rent Authority.[48] More requirements that are stringent have been put on the parties under MTA.
Deposit of rent Many of state rent control lawsdo not provide for deposit of rent lawfully payable to the landlord in respect of the building, before the authority as may be prescribed. Explicit provision provided for deposit of rent with the Rent Authority where the landowner does not accept the rent or refuses to give a receipt or if landowner does not accept the rent.[49] Transparency and accountability enabled provision.
Overstay of tenant No deterrent provision, therefore landlords fear to give their houses on rent, which in turn reduces the supply of renting houses in the market. It provides for compensation i.e. four times the rent, to the landlord.[50] MTA provides Remedy in favour of landlord.
Rent Receipt on payment of rent No provision. Every tenant is entitled to get a written receiptfrom the landowner for the amount paid to him.[51] Tenant friendly provision to eliminate abuse against tenants.
Security deposits No explicit provision existed for security deposits/ pugree in addition to rent. MTA provides for 2 months’ rent in residential property, 1-month rent in non-residential property as security deposit.[52] MTA provides elimination of abuse against tenants.
Inheritance of tenancy Order of inheritance has provided in most of the state RCAs. No order of successors has given in MTA.[53] MTA introduces more wide import in case of inheritance of tenancy.
Structural alteration to the rent premises Rent control laws provide for structural alteration without consent of tenant and increase rent. MTA provides for structural alteration to rent premises only if the same is provided in the  agreementwith the tenant and increase the rent.[54] Tenant friendly provision to eliminate abuse against tenants.
Adjudicatory Authority Controller or Civil Courts Rent Authority, Rent Court, Rent Tribunal[55] Specific adjudicatory bodies introduced in MTA for speedy disposal of rent related matters.

 

 

 

[1]Draft National Urban Rental Housing Policy, 2015, p 10.

[2]Id. At p 5.

[3]Id.

[4] Section 4 (4), MTA, 2019.

[5] Section 10, MTA, 2019.

[6] Section 14 (2), MTA, 2019.

[7] Section 15 (5), MTA, 2019.

[8] Section 20, MTA, 2019.

[9] Section 35 (2), MTA, 2019.

[10] Section 37, MTA, 2019.

[11] Section 36 (7), MTA, 2019.

[12] Section 38 (1), MTA, 2019.

[13] Section 2 (e), MTA, 2019.

[14] Section 3, MTA, 2019.

[15]Id.

[16] Section 7, MTA, 2019.

[17] Section 11 (2), MTA, 2019.

[18] Section 15 (3), MTA, 2019.

[19] Section 20, MTA, 2019.

[20] Section 22, MTA, 2019.

[21] Section 25, MTA, 2019.

[22] Section 8 & 9, MTA, 2019.

[23] Section 6, MTA, 2019.

[24] Section 9 (4), MTA, 2019.

[25] Section 11 (2), MTA, 2019.

[26] Section 13 (2), MTA, 2019.

[27] Section 14, MTA, 2019.

[28] Section 15 (4), MTA, 2019.

[29] Section 15 (5), MTA, 2019.

[30] Section 20, MTA, 2019.

[31] Section 23, MTA, 2019.

[32] Section 28, MTA, 2019.

[33] Section 8, MTA, 2019.

[34] Section 22, MTA, 2019.

[35] Section 46, MTA, 2019.

[36]Maharashtra Rent Control Act, 1999; Delhi Rent Control Act, 1958; Andhra Pradesh Buildings (Lease, Rent and Eviction) Control (Amendment) Act, 1960; The West Bengal Premises Tenancy Act, 1997.

[37] Section 3, Maharashtra Rent Control Act, 1999.

[38] Section 3, MTA, 2019.

[39] Section 2(b), MTA, 2019.

[40] Section 2(e), MTA, 2019.

[41]Id.

[42] Section 2(m), MTA, 2019.

[43] Section 2(a), MTA, 2019.

[44] Section 4, MTA, 2019.

[45] Section 7 (1), MTA, 2019.

[46] Section 8, MTA, 2019.

[47] Section 9, MTA, 2019.

[48] Section 9 (6), MTA, 2019.

[49] Section 14 (1), MTA, 2019.

[50] Section 22, MTA, 2019.

[51] Section 13 (2), MTA, 2019.

[52] Section 11, MTA, 2019.

[53] Section 6, MTA, 2019.

[54] Section 9 (6), MTA, 2019.

[55] Chapter VI & VII, MTA, 2019.

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Sound Principles are vital if the industry has to sustain and survive the occasional rough weather.

By Rajeev Jhawar (finserv@vinodkothari.com)

Prior to the Global Financial Crisis (GFC) of 2007-2008, the concerns about sound mortgage lending were largely lender-based. However, the GFC demonstrated how an exuberance on the part of lenders in trying to achieve ambitious loan books may push the entire world into a crisis. Since the GFC, regulators all over the world have been engaged in developing principles of sound mortgage lending.

A connected word is “responsible lending”. If lending is done without concerns about whether mortgage loan is inherently sound, and the borrower has the ability to perform, the lender acts irresponsibly. There are even suggestions that if the loan goes into default within certain number of months after its origination, the onus will lie on the lender to prove that the lender had acted responsibly. Thus, sound mortgage lending is no more the lender’s prudence; it goes further into the concept of responsible lending.

This article collates major global regulations relating to sound mortgage lending, aka responsible lending.

Additionally, it covers some of the best practices laid down by mortgage regulatory authorities of major economies which are in line with international bodies such as the Financial Stability Board (FSB), European Banking Association(EBA), and so on.

While the article does not delve into the details of specific underwriting practices, it does suggest a targeted approach to imposing stricter requirements.

Financial Stability Board(FSB) Guidelines

The FSB, based in Basel, Switzerland, was established after the 2009 G-20 London summit as a successor to the Financial Stability Forum (“FSF”). The FSB includes all G-20 major economies, 4 prior FSF members, and the European Commission. On April 18, 2012, the FSB issued its Principles, expressly seeking to develop “an international principles-based framework for sound underwriting practices.” The Principles include standards regarding:

The FSB Principles suggest best practices to be implemented in some fashion by member jurisdictions. However, as the FSB itself is not a regulatory body, the Principles do not attempt to establish specific rules that must be implemented or enforced. For example, the Principles do not mandate international loan-to-value ratios or down payment requirements, nor do they prohibit specific loan features. Indeed, the FSB acknowledges that the Principles are not meant to be a one size-fits-all approach to international underwriting standards.

The FSB states that the Principles “should be implemented according to national circumstances, and as appropriate to national institutional arrangements, whether through legislative, regulatory, or supervisory measures, or through industry practices.” While deferring to local implementation, the Principles emphasize that the consequences of weak residential mortgage underwriting practices in one country can be transferred globally through securitization of mortgages underwritten to weak standards.

The Principles are predicated on safety and soundness considerations – to improve institutions’ (and markets’) financial stability. They focus only on the credit-granting decision itself, and do not delve into other responsible practices, such as those related to post-origination loan servicing or administration, or overall credit risk management. Most notably, the Principles are not predicated on consumer protection (although strict underwriting, to the extent it lowers default and foreclosure rates, benefits consumers in general).[1]

The Principles will assist FSB members in their efforts to improve financial stability and prudential standards.

Effective verification of income and other financial information.[2]

  • Jurisdictions should ensure that lenders make reasonable inquiries and take reasonable steps to verify a borrower’s underlying income capacity
  • Jurisdictions should ensure that lenders maintain complete documentation of the information that leads to mortgage approval
  • Jurisdictions should ensure that incentives are aligned with accurate representation of borrowers’ income and other financial information.

Rationale: A borrower’s underlying income verification is crucial to effective mortgage underwriting. Jurisdictions should ensure that lenders verify and document each applicant’s current employment status, relevant income history, and other financial information (e.g. credit scores, credit registers) submitted for mortgage qualification. While other financial information can help to measure or to infer a borrower’s historical “propensity to repay”, income verification can help to measure a borrower’s “ability to repay.

Reasonable debt service coverage

  • Jurisdictions should ensure that lenders, while taking into account data protection rules in their jurisdiction, appropriately assess borrowers’ ability to service and fully repay their loans without causing the borrower undue hardship and over-indebtedness.
  • Jurisdictions should ensure that lenders make reasonable allowances for committed and other non-discretionary expenditures in the assessment of repayment capacity.
  • Jurisdictions should ensure that lenders provide borrowers with sufficient information to clearly understand the main elements which are taken into account in order to determine a borrower’s repayment capacity, the main characteristics of the loan including the costs, and risks associated with the loan in order to enable borrowers to assess whether the loan is appropriate to their needs and financial circumstances.

Rationale: The debt service coverage could assist institutions to minimize defaults and losses, and thus, promote stability of the financial system. Furthermore, it is an important factor in reducing the likelihood of consumer over-indebtedness and the negative social and economic impact of forced sales.

Appropriate loan-to-value (LTV) ratios

  • Jurisdictions should ensure that their regulatory and supervisory frameworks appropriately incentivize prudent approaches to the collateralization of mortgage loans. However, the LTV ratio should not be relied upon as an alternative to assessing repayment capacity.
  • Jurisdictions should ensure that lenders adopt prudent LTV ratios with an appropriate level of down payment that is substantially drawn from the borrower’s own resources, not from, for example another provider of finance, to ensure the borrower has an appropriate financial interest in the collateral.
  • Jurisdictions should ensure that lenders refrain from relaxing LTV ratios at the time of a boom in the property market.

Rationale: The LTV ratio is the ratio of loan amount to the value of the asset. While computing LTV we take into consideration the real market value of the property and not the depreciated value for tax or accounting purposes. While it is common for individual lenders to apply a cap on LTV ratios, it is not necessary for regulators and supervisors to mandate such a cap if they satisfy themselves that the underwriting standards are sufficiently prudent and are unlikely to be eroded under competitive pressure. However, jurisdictions may consider imposing or incentivizing limits on LTV ratios according to specific national circumstances.

Effective collateral management

  • Jurisdictions should ensure that lenders adopt and adhere to adequate internal risk management and collateral management processes
  • Jurisdictions should ensure that lenders adopt appraisal standards and methods that lead to realistic and substantiated property appraisals.
  • Jurisdictions should ensure that lenders require all appraisal reports to be prepared with appropriate professional skill and diligence, and that appraisers (whether internal or external) meet certain qualification requirements.
  • Jurisdictions should recognize the importance of sound regulation and oversight of appraisers, either through self-regulation or statutory means.
  • Jurisdictions should ensure that lenders maintain adequate appraisal documentation for collateral that is comprehensive and plausible.
  • Jurisdictions should ensure that lenders satisfy themselves that the claim on collateral is legally enforceable and can be realized in a reasonable period of time.
  • Jurisdictions should ensure that lenders deduct significant incentives or benefits offered in the context of buying the property (e.g. vendor financing of down payments, sales and financing concessions) that may inflate the price of the property in the course of the appraisal process.

Rationale: Collateral management and sound appraisal processes are cornerstone of the mortgage business. Periodic property appraisal would manifest the true value of the property which in turn would help the lenders to fathom whether the property has been appreciated or depreciated.

Prudent use of mortgage insurance

  • Jurisdictions should ensure that where mortgage insurance is used, it does not substitute for sound underwriting practices by lenders.
  • Jurisdictions should ensure that lenders carry out prudent and independent assessments of the risks related to the use of mortgage insurance, such as counterparty risk and the extent and details of the coverage of the mortgage insurance policies.
  • Jurisdictions should ensure that all mortgage insurers be subject to appropriate prudential and regulatory oversight and, where used, represent an effective transfer of risks from lenders to insurers.

Rationale: Mortgage insurance is an insurance policy that protects a mortgage lender or title holder in the event that the borrower defaults on payments, dies or is otherwise unable to meet the contractual obligations of the mortgage. Mortgage insurance lowers the risk of the lender thereby ensuring financial stability in case of any disruption or default by the borrower.

European Banking Authority(EBA) Guidelines

To ensure that potential risks associated with mortgage lending are managed adequately by credit institutions, and to contribute to the development of consistent practices in this area, the European Banking Authority (EBA) opined on good practices for mortgage lending. However, wording of the good practices laid down by EBA closely follows the FSB Principles.

The guidelines applies to loans to consumers that are: – secured either by residential mortgage or by another comparable security commonly used in some EU markets on immovable residential property; secured by a right related to immovable residential property; and loans, the purpose of which is to acquire or retain rights in immovable residential property.

In addition to FSB’s criteria concerning verification of information, EBA also suggests specifying the minimum period for which consumers should be asked to provide income information by creditors, using a specified minimum amount for living expenses for each household member as part of the creditworthiness assessment, requiring the calculation of a reasonable loan load or debt-to-income maximum for each consumer, the need for the creditor to consider documenting that the consumer is financially able to bear the risks attached to a foreign currency mortgage (which would include considering the impact of a severe depreciation of the local currency and an increase in foreign interest rates);the creditor having to provide numerical examples to illustrate the impact of increases in variable interest rates, or of currency fluctuations where the loan is a foreign currency mortgage.

Further, practice identified by EBA in relation to Loan to Value ratio involves the consumer needing to certify that any down payment is from their own funds rather than from other borrowing; that in the event of repayment being based on the sale of the asset, the assessment should consider changes in market value and liquidity rating.

Office of the Superintendent of Financial Institutions (OSFI) Guidelines

The Office of the Superintendent of Financial Institutions (OSFI) is an independent agency of the Government of Canada established in 1987 to contribute to public confidence in, and the safety and soundness of, the Canadian financial system. OSFI supervises and regulates federally registered banks and insurers, trust and loan companies, cooperative credit associations, and fraternal benefit societies, as well as private pension plans subject to federal oversight, and ensures that they are complying with their governing legislation.

The supervision of Federally Regulated Mortgage Insurers(FRMI) is principles-based. It requires the application of sound judgment in identifying and assessing risks, and determining, from a wide variety of supervisory and regulatory options available, the most appropriate method to ensure that the risks that a FRMI faces are adequately managed.

This Guideline sets out the Office of the Superintendent of Financial Institutions’ (OSFI’s) expectations for prudent residential mortgage insurance underwriting and related activities. This Guideline is applicable to all federally-regulated mortgage insurers (FRMIs) to which the Insurance Companies Act applies and that provide mortgage insurance for residential mortgage loans in Canada, and/or reinsurance for such insured loans.

Section II of this Guideline articulates six fundamental principles for sound residential mortgage insurance underwriting that has been illustrated in the table below:

Principle(s) Objective
Principle 1 relates to a FRMI’s governance and the development of business objectives, strategies and oversight mechanisms in respect of residential mortgage insurance underwriting.
Principle 2 Focuses on FRMI’s establishment of standards, and the initial assessment of lenders against those standards, for “qualified / approved” lender status
Principle 3 relates to the FRMI’s loan underwriting criteria for lenders (i.e., the characteristics defining insurable mortgage loans), as well as requirements for lenders, for initial and continuing mortgage insurance coverage
Principle 4 focuses on  FRMI’s ongoing due diligence into lenders’ underwriting practices
Principle 5 relates to assessment and validation of the mortgage insurer’s internal underwriting systems, models, and underwriters’ processes
Principle 6 focuses on the use of effective portfolio risk management, including stress testing and risk mitigation such as reinsurance

The final section of the Guideline outlines disclosure and supervisory requirements. However, our focus would be confined to Principle 2 to 4

A FRMI should ensure that a lender applying for mortgage insurance coverage is adequately qualified to offer and service mortgage loans and that it has adequate processes in place to comply with the FRMI’s mortgage insurance coverage requirements, before providing mortgage insurance coverage to that lender.

To carry out an initial assessment of a mortgage lender, a FRMI should establish sound qualification standards. Factors that should be considered include, but are not limited to:

The mortgage loan parameters shown below are central to FRMI central to its sound mortgage lending practices.

  • The purpose of the loan;
  • Maximum mortgage loan size and, if applicable, maximum exposure to any one borrower and/or related parties;
  • Maximum loan-to-value (“LTV”) ratio; and
  • Maximum allowable loan term and amortization length.

Besides establishing mortgage loan parameters, borrowers background and willingness and capacity to service debt are also significant to ensure prudent mortgage lending. As part of its criteria for mortgage loans, a FRMI should establish and outline prudent underwriting criteria for the assessment of the borrower, which should include, but is not limited to:

  • Background and Credit History: A FRMI should outline acceptable methods for lenders to assess the financial background of prospective borrowers, including the use of credit history checks and credit bureau reports. The mortgage loan criteria should outline the FRMI’s minimum credit bureau score requirements.
  • Down Payment: A FRMI should establish minimum down payments, as well as acceptable sources of down payment in its criteria. In particular, the FRMI should specify where traditional sources of down payment (e.g., borrower’s own equity) are required and cases where non-traditional sources for the down payment (e.g., borrowed funds) may be used. Where non-traditional sources of down payment are being used, further consideration should be given to establishing greater risk mitigation and/or additional premiums to compensate for increased risk. Incentive and rebate payments (i.e., “cash back”) should not be considered part of the down payment.
  • Income and Employment Verification: A FRMI should specify for lenders, processes for verifying a borrower’s underlying income and sources of income. This includes substantiation of employment status and the income history of the borrower. For borrowers who are self-employed, a FRMI should outline reasonable steps for lenders to obtain income verification (e.g., Notice of Assessment) and relevant business documentation.
  • Debt Service Coverage: A FRMI should outline quantitative limits on debt service coverage ratios, using measures such as the total debt service (TDS) and gross debt service (GDS) ratios, as a means to assess affordability. To reduce ambiguity, a FRMI should clearly outline the formulae to be used by lenders to calculate debt service coverage and describe how key inputs (e.g., income, mortgage loan interest and principal repayment, other debt obligations, etc.) should be treated.
  • Loan Recourse and Additional Assessment Criteria: A FRMI’s decision to insure a mortgage loan (or require higher risk mitigation) should consider the effectiveness of recourse against the borrower in the event of borrower default. To the extent possible, a FRMI should also consider factors that would not ordinarily be captured by income and debt serviceability metrics, such as the borrower’s assets (e.g., savings).

Furthermore, conducting a thorough assessment of the underlying property, prior to insurance approval, helps to reduce risk in the residential mortgage insurance business. As part of the FRMI’s criteria for mortgage loans, a FRMI should outline clear and transparent policies in respect of the property acting as collateral, including insurable property types, responsibility for property valuation and property valuation assessment.

In assessing the value of a property (or requiring a third party to carry out the assessment), a FRMI should take a risk-based approach, and consider a combination of valuation tools and appraisal processes appropriate to the underlying risk being undertaken (e.g., automated valuation model, review of comparable properties, on-site inspections, drive-by appraisals, progress inspection reports, and/or a full appraisal). In general, a FRMI should not rely exclusively on any single method for property valuation. A FRMI should undertake a more comprehensive and prudent approach to collateral valuation for applications with higher overall risk (e.g., less liquid properties, higher risk borrowers).

OSFI expects FRMI to undertake reasonable inquiries and reviews, on a risk-based and periodic basis, into lenders’ underwriting practices as well as to exercise a relatively higher level of examination and scrutiny in respect of underperforming lenders (e.g., those with proportionately higher levels of delinquencies and claims, on a risk-adjusted basis) or whose practices have been found unsatisfactory or inconsistent with the insurer’s criteria or conditions established in the mortgage insurance policies (e.g., poor loan documentation, inconsistent reporting, evidence of misrepresentation, forms of negligence, etc.)

Consumer Financial Protection Bureau Guidelines (CFPB)

The Consumer Financial Protection Bureau (CFPB) is a regulatory agency in United States charged with overseeing financial products and services that are offered to consumers. The Office of Fair Lending research, community affairs, consumer complaints, and the Office of Financial Opportunity are the several units into which the CFPB is actively involved.

Post deterioration in underwriting standards leading to dramatic increases in mortgage delinquencies and rates of foreclosures, the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act created broad-based changes to how creditors make loans and included new ability-to-repay requirements, which the CFPB is charged with implementing.

The CFPB expects the mortgage lenders to evaluate consumer’s financial information. A lender generally must document: a borrower’s employment status; income and assets; current debt obligations; credit history; monthly payments on the mortgage; monthly payments on any other mortgages on the same property; and monthly payments for mortgage-related obligations. Besides, lenders can’t base their evaluation of a consumer’s ability to repay on teaser rates rather they will have to determine the consumer’s ability to repay both the principal and the interest over the long term − not just during an introductory period when the rate may be lower.

Further, Lenders will be presumed to have complied with the Ability-to-Repay rule if they issue “Qualified mortgages.” In order to be classified as qualified mortgage, certain criteria have been listed by the CFPB which are as follows:[3]

In order to ensure responsible mortgage lending practice CFPB updates the norms accordingly and which are in the best interest of the economy.

The Australian Prudential Regulation Authority(APRA) Guidelines

The Australian Prudential Regulation Authority(APRA) is an independent statutory authority that supervises institutions across banking, insurance and promotes financial system stability in Australia. APRA has implemented a range of supervisory measures to reinforce sound residential mortgage lending practices. This has included benchmarks on investor loan growth, prudential guidance to strengthen industry standards and targeted reviews to scrutinize lending practices.

While establishing norms for mortgage lending, APRA has had regard to the Financial Stability Board’s (FSB) Principles for Sound Residential Mortgage Underwriting Practices (FSB principles), which sets out minimum underwriting standards that the FSB encourages supervisors to implement. Although the exact details may differ somewhat to reflect local conditions, but the underlying theme remains the same.

In respect to the loan serviceability, APRA expects authorized deposit taking institutions(ADI) to undertake a new serviceability assessment whenever there are material changes to the current or originally approved loan conditions. Such changes would include a change of repayment basis from principal and interest to interest-only, or the extension of an existing interest-only period. A change from a fixed-rate basis to a floating-rate basis (or vice versa), or an extension in the tenor of the loan are other examples of material changes. A new serviceability assessment would be appropriate for any change that increases the total repayments over the life of the loan, even when immediate periodic repayments are lower than under the previous loan conditions.

Loan serviceability policies would include a set of consistent serviceability criteria across all mortgage products. A single set of serviceability criteria would promote consistency by applying the same interest rate buffers, serviceability calculation across different products offered by an ADI. Where an ADI uses different serviceability criteria for different products or across different ‘brands’, APRA expects the ADI to be able to articulate and be aware of commercial and other reasons for these differences, and any implications for the ADI’s risk profile and risk appetite.

ADIs generally uses net income surplus (NIS) model to make an assessment as to whether the borrower can service a particular loan, based on the nature of the borrower’s income and expenses. Good practice would ensure that the borrower retains a reasonable income buffer above expenses to account for unexpected changes in income or expenses as well as for savings purposes.

When assessing a borrower’s income, an ADI would discount or disregard temporarily high or uncertain income. Similarly, it would apply appropriate adjustments when assessing seasonal or variable income sources. For example, significant discounts are generally applied to reported bonuses, overtime, rental income on investment properties, other types of investment income and variable commissions. Good practice is to apply discounts of at least 20 per cent on most types of non-salary income; in some cases, a higher discount would be appropriate. In some circumstances, an ADI may choose to use the lowest documented value of such income over the last several years, or apply a 20 per cent discount to the average amount received over a similar period. Self-employed borrowers are generally more difficult to assess for borrowing capacity, as their income tends to be less certain.

Accordingly, an ADI would make reasonable inquiries and take reasonable steps to verify a self-employed borrower’s available income. Verification of a self-employed borrower’s stated income is normally achieved through a combination of obtaining income and cash flow verification and supporting documentation, including third-party verification. This could include, for example seeking written advice from the accountant/tax advisor confirming actual or likely income levels; reviewing income tax assessment notices and returns; and so on. In the case of investment property, common industry practice is to include expected rent on a residential property as part of a borrower’s income when making a loan origination decision. In APRA’s view, good serviceability policies incorporate a minimum haircut of 20 per cent on expected rental income, with larger haircuts appropriate for properties where there is a higher risk of non-occupancy.

Conclusion

In all instances, a robust and effective assessment of individual affordability must underpin any sustainable lending model. The policymakers should ensure that different types of mortgage providers, whether or not currently regulated, are subject to consistent mortgage underwriting standards, and consistent regulatory oversight and enforcement to implement such standards.

Lending standards should be applied in a coordinated way, leading to a balanced approach that can vary with the national or economic context. Such an approach aims at preventing excessive build-up of risks (e.g. “risk layering”), avoiding one-dimensional policies that could exclude some creditworthy categories from housing finance, and dampening cycles that could arise from neglecting important dimensions, both in overheating phases (undue relaxation) or downturns.


[1] http://documents.jdsupra.com/ce2f082e-5275-4254-8e3d-e03e0d076f23.pdf

[2] http://www.fsb.org/wp-content/uploads/r_120418.pdf?page_moved=1

[3] https://www.consumerfinance.gov/about-us/newsroom/consumer-financial-protection-bureau-issues-rule-to-protect-consumers-from-irresponsible-mortgage-lending/

 

SEBI extends disclosure related exemption to eligible NBFCs & HFCs

-Amends Reg. 29 (4) of SAST Regulations, 2011 dealing with disclosures relating to pledge

By Simran Jalan (simran@vinodkothari.com)

SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (SAST Regulations) provides requirement in relation to manner of acquisition, takeover, disclosure requirements, acquisitions triggering open offer etc. It is a common phenomenon to pledge the shares of a listed entity as a security for availing of loan from Banks, financial institutions.

In line with the approval granted by SEBI in its Board meeting held on December 12, 2018[1] SEBI issued SEBI (Substantial Acquisition of Shares and Takeovers) (Third Amendment) Regulations, 2018[2] on December 28, 2018 (‘Amendment Regulations’) exempting certain class of NBFCs and HFCs from the requirement of disclosing acquisition (resulting from encumbrance) and disposal (resulting from release of encumbrance). This article discusses the impact of the said amendment.

The Amendment Regulations are effective from December 31, 2018.

Read more

Anticipated boost in liquidity position of NBFCs and HFCs

By Vineet Ojha (vineet@vinodkothari.com)

Read more