NHB Act 30AChapter V · Provisions Relating to Housing Finance Institutions Receiving Deposits
Section 30A · Power of Reserve Bank to determine policy and issue directions
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1[30A. Power of Reserve Bank to determine policy and issue directions-- (1) If the Reserve Bank
is satisfied that, in the public interest or to regulate the housing finance system of the country to its
advantage or to prevent the affairs of any housing finance institution which is a company being conducted
in a manner detrimental to the interest of the depositors or in a manner prejudicial to the interest of such
housing finance institutions, it is necessary or expedient so to do, it may determine the policy and give
directions to all or any of the housing finance institution which is a company relating to income
recognition, accounting standards, making of proper provision for bad and doubtful debts, capital
adequacy based on risk weights for assets and credit conversion factors for off balance-sheet items and
also relating to deployment of funds by a housing finance institution which is a company or a group of
such housing finance institutions or housing finance institutions which are companies generally, as the
case may be, and such housing finance institutions shall be bound to follow the policy so determined and
the direction so issued.
(2) Without prejudice to the generality of the powers vested under sub-section (1), the Reserve Bank may give directions to housing finance institutions which are companies generally or to a group of such housing finance institutions or to any housing finance institution which is a company in particular as to--
(a) the purpose for which advances or other fund-based or non-fundbased accommodation may not be made; and
(b) the maximum amount of advances or other financial accommodation or investment in shares and other securities which, having regard to the paid-up capital, reserves and deposits of the housing finance institution and other relevant considerations, may be made by that housing finance institution to any person or a company or to a group of companies.
(3) The Reserve Bank may, if it considers necessary in the public interest so to do, issue directions to housing finance institutions which are companies accepting deposits referred to in section 31, either generally or to any group of such housing finance institutions accepting deposits, and in particular, in respect of any matters relating to, or connected with, the receipt of deposits, including credit rating of the housing finance institution which is a company accepting deposits, the rates of interest payable on such deposits, and the periods for which deposits may be received.
(4) If any housing finance institution which is a company accepting deposits fails to comply with any direction issued under sub-section (3), the Reserve Bank may, by order, prohibit the acceptance of deposits by that housing finance institution.]
(2) Without prejudice to the generality of the powers vested under sub-section (1), the Reserve Bank may give directions to housing finance institutions which are companies generally or to a group of such housing finance institutions or to any housing finance institution which is a company in particular as to--
(a) the purpose for which advances or other fund-based or non-fundbased accommodation may not be made; and
(b) the maximum amount of advances or other financial accommodation or investment in shares and other securities which, having regard to the paid-up capital, reserves and deposits of the housing finance institution and other relevant considerations, may be made by that housing finance institution to any person or a company or to a group of companies.
(3) The Reserve Bank may, if it considers necessary in the public interest so to do, issue directions to housing finance institutions which are companies accepting deposits referred to in section 31, either generally or to any group of such housing finance institutions accepting deposits, and in particular, in respect of any matters relating to, or connected with, the receipt of deposits, including credit rating of the housing finance institution which is a company accepting deposits, the rates of interest payable on such deposits, and the periods for which deposits may be received.
(4) If any housing finance institution which is a company accepting deposits fails to comply with any direction issued under sub-section (3), the Reserve Bank may, by order, prohibit the acceptance of deposits by that housing finance institution.]
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