After raising the capital requirement by five times to R10 crore for the existing housing finance companies, the housing finance regulator, National Housing Bank (NHB) has given them three years? time to achieve the new capital requirement.
Speaking to FE, RV Verma, CMD, NHB, said, ?High capital requirement is important for HFCs for their stability and expansion in business. This will ensure that promoters have the willingness and capacity to contribute to the company?s capital on the long-term basis.?
The new norm will not impact the big housing finance companies like HDFC , LIC Housing and will be applicable to 16 HFCs, out of a total of 52 existing HFCs, in the country, said Verma.
All the 16 HFCs who will be impacted by the new move have net-owned fund in the region of R2.1 crore to R9 crore. As per new norms, all the 16 HFCs are expected to have net worth fund of to the tune of R4 crore, as against R2 crore, by June 30, 2012 and R7 crore by June, 30, 2013. All HFCs will have to have R10 crore by March 31, 2014.