In exercise of powers conferred under section 35B read with sub-section (1) and (2) of Section 29B of the National Housing Bank Act, 1987, the National Housing Bank being satisfied that it is necessary so to do, hereby declares that provisions of sub-sections (1) and (2) of Section 29B of the said Act shall not apply to a housing finance company, subject to the conditions that-
(A) Every housing finance company shall
(1) invest and continue to invest in India in unencumbered approved securities valued at a price not exceeding the current market price of such securities, an amount which, at the close of business on any day, shall not be less than six percent of the public deposits outstanding at the close of business on the last working day of the second preceding quarter.
(2) maintain in India in an account with a scheduled bank in term deposits or certificate of deposits (free from charge or lien) or in deposits with the National Housing Bank or by way of subscription to the bonds issued by the National Housing Bank or partly in such an account or in such deposit or partly by way of such subscription, a sum which, at the close of business on any day, together with the investment made under clause (1) shall not be less than twelve and a half percent of the public deposits outstanding at the close of business on the last working day of the second preceding quarter.
(B) All other provisions of Section 29B shall mutatis mutandis be applicable to the above requirement as if the expression “public deposit” is the same as the expression “deposit” as contemplated under the said provision.
“Public deposit” shall have the same meaning as defined under paragraph 2 (1) (w) of the Housing Finance Companies (NHB) Directions, 2001.