IT Framework for the HFCs

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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

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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