RBI Issues Revised Regulatory Framework for HFCs and NBFCs: Key Changes in Public Deposit Acceptance
MAS Team | 06 September 2024
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The Reserve Bank of India (RBI) has released a revised regulatory framework for Housing Finance Companies (HFCs) and Non-Banking Financial Companies (NBFCs) on August 12, 2024, set to take effect from 1 January 2025. This update includes several changes to the guidelines for accepting public deposits, with a focus on improving transparency and customer service.
Key changes in the revised framework include:
Nomination Acknowledgment: NBFCs are now required to provide written acknowledgment for all nomination-related forms, including filling, cancellation, and variation. This acknowledgment must be given to all customers, regardless of whether they specifically request it.
Nomination Information on Passbooks: NBFCs must indicate the nomination status on passbooks and receipts with the legend "Nomination Registered." If the customer agrees, the nominee's name should also be included in the passbook/ receipt.
Premature Withdrawal of Deposits:
- Tiny deposits can be paid in full without interest before three months from the date of acceptance.
- For other public deposits, up to 50% of the principal sum or Rs5 lakh (whichever is lower) can be paid prematurely without interest.
- In cases of critical illness, 100% of the principal sum can be paid prematurely without interest.
Maturity Intimation: The notice period for informing depositors about their deposit's maturity has been reduced from two months to 14 days in advance.
These changes aim to enhance customer service, provide greater flexibility in accessing funds in emergencies, and ensure better communication regarding deposit maturities. The revised framework applies to both new and existing deposit contracts, even if the latter do not explicitly allow for premature withdrawal within three months.
The RBI's updated guidelines reflect a commitment to improving the regulatory environment for HFCs and NBFCs while prioritizing depositor interests and operational transparency.
Dear Investor,
In case of any grievance / complaint :
In case of any grievance / complaint :
- Please contact Compliance Officer Shraddha Mhatre at [email protected] and Phone No. - 91-22-35131664.
- You may also approach CEO Debashis Basu at email- id [email protected] and Phone No. - 91-22-35131664.
