The Reserve Bank of India (RBI), on March 10, 2026, issued the Reserve Bank of India (Housing Finance Companies) Amendment Directions, 2026.
The following has been amended namely:-
• These Amendment Directions modify the Master Direction mentioned as under: Paragraph 10(16) shall be replaced by:
“10(16) “Owned Fund” means paid up equity capital, preference shares which are compulsorily convertible into equity, free reserves including quarterly profits, balance in share premium account, and capital reserves representing surplus arising out of sale proceeds of asset, excluding reserves created by revaluation of asset, as reduced by accumulated loss balance, book value of intangible assets and deferred revenue expenditure, if any.
Inclusion of quarterly profits shall be subject to the following conditions:
(i) The financial statements shall be subjected to limited review / audit on a quarterly basis by the statutory auditors.
(ii) Such profits shall be reduced by average dividend paid in the last three years and the amount which can be reckoned for inclusion would be arrived at as under:
EPt = NPt - 0.25 *D*t
Where:
EPt = Eligible profit up to quarter ‘t’ of the current financial year, t varies from 1 to 4
NPt = Net profit up to quarter ‘t’
D = average dividend paid for / pertaining to the last three financial years
Losses in the current year shall be fully deducted from Owned Fund.
The HFC shall not be required to deduct a Right-of-Use (ROU) asset (created in terms of Ind AS 116-Leases) from Owned Fund, provided the underlying asset being taken on lease is a tangible asset.”
[Notification No. RBI/2025-26/228 - DOR.CAP.REC.No.418/21.01.002/2025-26]
