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Housing Finance Companies (HFCs) have not got any relief or deferral on IND-AS implementation, on the lines extended for banks.
Housing finance regulator National Housing Bank (NHB) has now directed HFCs to comply with the provisions of IND-AS as notified by the Corporate Affairs Ministry (MCA). This would mean HFCs will have to implement IND-AS with effect from April 1 this year.
It may be recalled that Reserve Bank of India (RBI) has allowed banks to defer IND-AS implementation by one year. Banks were earlier required to implement IND-AS from April 1,2018– now this has been put off by one year.
"We have now issued a circular on IND-AS”, Sriram Kalyanaraman, Managing Director & CEO, NHB told BusinessLine here.
Currently, the total number of HFCs registered with NHB stood at 95. This NHB directive comes close on the heels of the Corporate Affairs Ministry rejecting NBFCs plea for deferral of IND-AS implementation by one year.
IND-AS is a set of accounting norms developed by Indian authorities, which converge with the the International Financial Reporting Standards (IFRS). The latest NHB circular require HFCs to adopt sound methodologies, systems/procedures, commensurate with the size, complexity, risk, profile etc, specific to them while implementing Ind-AS.
However, for regulatory and supervisory purposes, including various kinds of reporting to the NHB, HFCs should continue to follow the provisions of National Housing Bank Act 1987 and Housing Finance Companies (NHB) Directions 2010, including framework on prudential norms, and other related circulars issued in this regard by NHB from time to time.
SUNREF INDIA
Kalyanaraman also expressed confidence that the SUNREF Housing India programme will get operationalised this year. It may be recalled that NHB had last year joined hands with the French Development Agency (AFD) and the European Union to launch the SUNREF Housing India programme as part of efforts aimed at scaling up green housing projects in India.
SUNREF(Sustainable Use of Natural Resources and Energy Finance) Housing India will provide a financing of €112 million to NHB, through a credit line of €100 million with AFD and a grant of € 12 million financed by the European Union.
SFB RATING MODEL
NHB is also working on a rating model for small finance banks. Kalyanaraman said that small finance banks -- a type of niche banks -- have started offering housing finance and it was important to have a rating model focused on them.
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