GAO Report: Federal Website for Private Student Loans May Be Unneeded

As you know that our country is facing liquidity issues and the COVID-19 outbreak has not done any good to it especially the real estate sector. The government has been taking various measures to increase the liquidity inflow in the country. For the same, The Reserve Bank of India (RBI) made amendments to the administrative structure for housing finance companies (HFCs) on 22 October 2020.



The Apex Bank directed HFCs to lend at least 60% of their net assets to housing through the final RBI guidelines issued on 22 October, which is a follow-up to a drafted issued in June 2020. The RBI has also ordered HFCs and non-banking financial institutions, which may not currently lend an appropriate amount of their total housing loans, to achieve this stage by March 2024.


Net assets deployed for housing loans by HFCs


Timeline Min % of total assets Min % of total assets for individual

March 31, 2022 50% 40%


March 31, 2023 55% 45%

March 31, 2024 60% 50%

[Source: RBI]


“These HFCs are expected to submit a board-approved plan to the Reserve Bank within a period of three months, including a roadmap to meet the above-mentioned requirements and a schedule for transition,” read the final RBI guidelines.


The followings are the highlights of the Amendment made for HFC by RBI:


As per the RBI guidelines issues the word ‘providing finance for housing’ or ‘housing finance’ is not formally specified in past and hence they gave a formal definition of what housing finance means as follow:

  1. Loans to individuals or group of individuals including co-operative societies for construction/ purchase of new dwelling units.
  2. Loans to individuals for purchase of old dwelling units.
  3. Loans to individuals for purchasing old/ new dwelling units by mortgaging existing dwelling units.
  4. Loans to individuals for purchase of plots for construction of residential dwelling units provided a declaration is obtained from the borrower that he intends to construct a house on the plot within a period of three years from the date of availing of the loan.


  1. Loans to individuals for renovation/ reconstruction of existing dwelling units.
  2. Lending to public agencies including state housing boards for construction of residential dwelling units.
  3. Loans to corporates/ Government agencies (through loans for employee housing).
  4. Loans for construction of educational, health, social, cultural, or other institutions/centres, which are part of housing project in the same complex and which are necessary for the development of settlements or townships;
  5. Loans for construction of houses and related infrastructure within the same area, meant for improving the conditions in slum areas for which credit may be extended directly to the slum-dwellers on the guarantee of the central Government, or indirectly to them through the State Governments;
  6. Loans given for slum improvement schemes to be implemented by Slum Clearance Boards and other public agencies;