Mumbai, Nov 17 (UNI) The Reserve Bank of India today said Housing Finance Companies (HFCs) seeking Short term Foreign Currency borrowings should use the resources only for refinancing the short-term liabilities and not for booking fresh assets.
Specifying the conditions for the new measure, it announced over the weekend, to improve credit flow to Housing Finance Companies, the RBI in a release said the maximum maturity should not exceed three years.
The measure was a temporary one with Housing Finance Companies registered with National Housing Bank permitted to raise short-term foreign currency borrowings, under the approval route. Housing Finance Companies, complying with capital adequacy norms and other prudential norms laid down by National Housing Bank would be elible to secure such funding from Multilateral or bilateral financial institutions, reputed regional financial institutions and foreign equity holders with minimum direct equity holdings of 25 per cent.
RBI said the maximum amount should not exceed 50 per cent of the NOF or USD 10 million (or its equivalent), whichever is higher.
All-in cost ceiling should not exceed 6 months Libor plus 200 bps (for the respective currency of borrowing or applicable benchmark) The borrowings should be fully swapped into Rupees for the entire maturity, RBI said.
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