Fixed Deposits with HFCs to become more secure!
The RBI has also taken many steps in direction of making fixed deposits made with the Housing Finance Companies (HFCs) more secured.
According to latest guidelines issued by the Reserve Bank of India (RBI), now you will not be able to open fixed deposits of tenures of more than five years with any of the Housing Finance Companies (HFCs). This means, from now onwards, you will only be able to open a term deposit with an HFC for a maximum tenure of only five years. This rule was already applicable on fixed deposits of the Non Banking Financial Companies (NBFCs). But now RBI has extended this rule to HFC fixed deposits as well.
The RBI has also taken steps in direction of making public deposits made with the HFCs even more secured.
Now HFCs are required to keep aside more cash than before against fixed deposits advanced to general public. RBI has also put caps on the amount HFCs can earmark for advancing term deposits to the general public.
All these steps combined together will make peoples’ deposits kept with these financial institutions even more secured. It will encourage depositors to open more FDs with reputed HFCs in the country.
Earlier, National Housing Bank used to govern the rules and regulations of HFCs in the country, currently, RBI controls functionality of HFCs in the country.
Currently, there are more than 100 HFCs in India. Not all of these financial institutions (FIs) allow customers to open fixed deposits. Most of these FIs allow customers to open term deposits with other group companies.
All NBFCs including HFCs are allowed to give term deposit options to customers for period ranging from one year to five years. Some HFCs give additional rates to senior citizens as well. These rates are given over and above applicable rates.
Earlier, Housing Development Finance Corporation was the largest HFC in the country. But after its merger with HDFC Bank, it has ceased to exist. So, LIC Housing Finance is currently India’s largest HFC.
According to National Housing Bank, following are top 10 HFCs in the country according to asset size:
1. LIC Housing Finance Limited
2. Piramal Capital & Housing Finance Limited
3. Housing and urban Development Corporation Limited
4. Indiabulls Housing Finance Limited
5. PNB Housing Finance Limited
6. Bajaj Housing Finance Limited
7. Tata Capital Housing Finance Limited
8. Can Fin Homes Limited
9. IIFL Home Finance Limited
10. ICICI Home Finance Company Limited