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

– Sikha Bansal and Priya Udita


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.


  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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Union Budget 2019-20: Impact on Corporate and Financial sector

Revised Guidelines on KYC & Anti-Money Laundering Measures for HFCs

IT Framework for the HFCs

By Vineet Ojha (finserv@vinodkothari.com)

Over the years, the Housing Finance Company (HFC) sector has grown in size and complexity. As the HFC industry matures and achieves scale, its Information Technology /Information Security (IT/IS) framework, Business Continuity Planning (BCP), Disaster Recovery (DR) Management, IT audit, etc. must also be benchmarked to best practices. To enhance the safety, security, efficiency in processes leading to benefits for HFCs and their customers, the National Housing Bank (NHB) has come up with Information Technology Framework for HFCs (“Guidelines”) vide its notification no. NHB/ND/DRS/ Policy Circular No. 90/2017-18 dated June 15, 2018. Guidelines on IT Framework for the HFC sector that are expected to enhance safety, security, efficiency in processes leading to benefits for HFCs and their customers are enclosed.

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RBI relaxes thresholds for affordable housing finance

Financial Services Division – finserv@vinodkothari.com


The Reserve Bank of India came out with a notification on 19th June, 2018[1] amending the provisions of priority sector lending targets and classification[2], in relation to affordable housing finance. To give a background, financing affordable housing units qualifies to be a priority sector lending. The term “affordable housing unit” us a defined term and this time RBI has brought amendments to it.

The revised thresholds stand as follows:

  Before the notification After the notification
Units in metropolitan centres Loans upto Rs. 28 lakhs and the value of the property not exceeding Rs. 35 lakhs Loans upto Rs. 35 lakhs and the value of the property not exceeding Rs. 45 lakhs
Units in other centres Loans upto Rs. 20 lakhs and the value of the property not exceeding Rs. 25 lakhs Loans upto Rs. 25 lakhs and the value of the property not exceeding Rs. 30 lakhs


The intention of this change is to bring the PSL guidelines in line with the Affordable Housing scheme launched by the Government of India.

Further, the other change that has been brought in by the notification is change in the income limits of the EWS and LIG. Earlier, those families with annual household income of upto Rs. 2 lakhs qualified as EWS families and those with annual household income of upto Rs. 3 lakhs qualified as LIG families. The income levels have now been increased to Rs. 3 lakhs and Rs. 6 lakhs for EWS and LIG families respectively.

With this change the provisions of Master Directions on PSL requirements have been synchronised with the Pradhan Mantri Awas Yojana.

[1] https://rbi.org.in/Scripts/NotificationUser.aspx?Id=11308&Mode=0

[2] https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=10497

FDI in financial services sector: restrictions brought back but for unregulated entities


By Saloni Mathur & Kirti Sharma , (finserv@vinodkothari.com)

The SEBI in its Board Meeting on 18th September, 2017[1] approved several changes to the regulations issued for REITs.

The recent amendments by way of Securities and Exchange board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2017[2] and the Securities and Exchange board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2017[3] has brought about several changes in the existing regulations, which are the necessary incorporations to the changes that were proposed in the board meeting held on September 18th, 2017. SEBI in its Board Meeting made certain amendments to the SEBI (infrastructure Investment Trusts) Regulations, 2014 and SEBI (Real Estate Investment Trusts) Regulations, 2014 (referred to as ‘REIT Regulations’).

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Standard Procedure for Valuation to be followed by HFCs.

By Shreya Routh, (finserv@vinodkothari.com)


Housing Finance Company (HFC) is a type of non-banking financial institution which is primarily engaged in the business of providing home loans and other related products. Unlike other Non-Banking Financial Companies which are governed under the regulatory framework of RBI, HFCs are regulated by the National Housing Banks (NHB). Collateral securities are accepted against loans advanced by HFCs which include the property for which loan has been granted and some other collaterals as well. Since properties serve as the underlying asset on which financing is given, the amount of loan advanced depends upon the value of the collateral offered. Read more

NHB softens provisioning norms for HFCs

By Anita Baid, (legal@vinodkothari.com)

The National Housing Bank (NHB) vide its notification no. NHB.HFC.DIR.18/MD&CEO/2017[1] dated 02nd August, 2017 has made certain amendments to the Housing Finance Companies (NHB) Directions, 2010 (‘Directions’). The provisions of the Directions is applicable to every housing finance company (HFC) registered under section 29A of the National Housing Bank Act, 1987. A brief summary of the amendments and the possible impact thereon is provided herein below.

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