Reserve Bank of India (Housing Finance Companies) Amendment Directions, 2026

This notification (March 10, 2026) issued by the Reserve Bank of India amends the Housing Finance Companies Directions, 2025, effective immediately, to provide clarification on the components reckoned in the computation of ‘Owned Fund’.

The amendment replaces paragraph 10(16) to redefine ‘Owned Fund’ to mean paid-up equity capital, compulsorily convertible preference shares, free reserves including quarterly profits, share premium balance and capital reserves, reduced by accumulated losses, intangible assets and deferred revenue expenditure. Inclusion of quarterly profits is subject to financial statements being subjected to limited review or audit by statutory auditors on a quarterly basis, and such profits being reduced by average dividend paid in the last three years as per a prescribed formula. Losses in the current year shall be fully deducted from Owned Fund. Additionally, a Right-of-Use (ROU) asset created under Ind AS 116 for tangible assets taken on lease shall not be required to be deducted from Owned Fund.

The amendment brings clarity to the computation of Owned Fund for Housing Finance Companies, ensuring accurate and consistent application of capital norms. The inclusion of quarterly profits with defined conditions improves the responsiveness of Owned Fund computation to current financial performance, while the ROU asset exemption provides operational relief for HFCs that lease tangible assets.