Section 29C. Reserve fund

29C. Reserve fund. —(1) Every housing finance institution which is a company shall create a reserve fund and transfer therein a sum not less than twenty per cent. of its net profit every year as disclosed in the profit and loss account and before any dividend is declared. Explanation .—A housing finance institution creating and maintaining any special reserve in terms of clause (viii) of sub-section (1) of section 36 of the Income-tax Act, 1961 (43 of 1961), may take into account any sum transferred by it for the year to such special reserve for the purposes of this sub-section. (2) No appropriation of any sum from the reserve fund including any sum in the special reserve which has been taken into account for the purposes of reserve fund in terms of sub-section (1), shall be made by such housing finance institution except for the purpose as may be[1] [specified by the Reserve Bank] from time to time and every such appropriation shall be[2] [reported to the National Housing Bank and the Reserve Bank] within twenty-one days from the date of such withdrawal: 3[Provided that the National Housing Bank or the Reserve Bank] may, in any particular case and for sufficient cause being shown, extend the period of twenty-one days by such further period as it thinks fit or condone any delay in making such report. (3) Notwithstanding anything contained in sub-section (1), the Central Government may, on the recommendation of[4] [the Reserve Bank] and having regard to the adequacy of the paid-up capital and reserves of a housing finance institution which is a company in relation to its deposit liabilities, declare by order in writing that the provisions of sub-section (1) shall not be applicable to such housing finance institution for such period as may be specified in the order: Provided that no such order shall be made unless the amount in the reserve fund under sub-section (1), together with the amount in the share premium account, is not less than the paid-up capital of the housing finance institution.] 5 [30. Reserve Bank to regulate or prohibit issue of prospectus or advertisement soliciting deposits of money— The Reserve Bank may, if it considers necessary in the public interest so to do, by — general or special order, (a) regulate or prohibit the issue by any housing finance institution which is a company of any prospectus or advertisement soliciting deposits of money from the public; and (b) specify the conditions subject to which any such prospectus or advertisement, if not prohibited, may be issued.] [6] [30A. Power of Reserve Bank to determine policy and issue directions— (1) If the Reserve Bank is satisfied that, in the public interest or to regulate the housing finance system of the country to its advantage or to prevent the affairs of any housing finance institution which is a company being conducted in a manner detrimental to the interest of the depositors or in a manner prejudicial to the interest of such housing finance institutions, it is necessary or expedient so to do, it may determine the policy and give directions to all or any of the housing finance institution which is a company relating to income recognition, accounting standards, making of proper provision for bad and doubtful debts, capital adequacy based on risk weights for assets and credit conversion factors for off balance-sheet items and also relating to deployment of funds by a housing finance institution which is a company or a group of such housing finance institutions or housing finance institutions which are companies generally, as the 1. Subs. by Act 23 of 2019, s. 156, for "specified by the National Housing Bank" (w.e.f. 9-8-2019). 2. Subs. by s. 156, ibid ., for "reported to the National Housing Bank" (w.e.f. 9-8-2019). 3. Subs. by s. 156, ibid ., for "Provided that the National Housing Bank" (w.e.f. 9-8-2019). 4. Subs. by s. 156, ibid ., for "the National Housing Bank" (w.e.f. 9-8-2019). 5. Subs. by s. 157, ibid ., for section 30 (w.e.f. 9-8-2019). 6. Subs. by s. 158, ibid ., for section 30A (w.e.f. 9-8-2019). case may be, and such housing finance institutions shall be bound to follow the policy so determined and the direction so issued. (2) Without prejudice to the generality of the powers vested under sub-section (1), the Reserve Bank may give directions to housing finance institutions which are companies generally or to a group of such housing finance institutions or to any housing finance institution which is a company in particular as to— (a) the purpose for which advances or other fund-based or non-fundbased accommodation may not be made; and (b) the maximum amount of advances or other financial accommodation or investment in shares and other securities which, having regard to the paid-up capital, reserves and deposits of the housing finance institution and other relevant considerations, may be made by that housing finance institution to any person or a company or to a group of companies. (3) The Reserve Bank may, if it considers necessary in the public interest so to do, issue directions to housing finance institutions which are companies accepting deposits referred to in section 31, either generally or to any group of such housing finance institutions accepting deposits, and in particular, in respect of any matters relating to, or connected with, the receipt of deposits, including credit rating of the housing finance institution which is a company accepting deposits, the rates of interest payable on such deposits, and the periods for which deposits may be received. (4) If any housing finance institution which is a company accepting deposits fails to comply with any direction issued under sub-section (3), the Reserve Bank may, by order, prohibit the acceptance of deposits by that housing finance institution.] 1[31. Power of National Housing Bank to collect information from housing finance institutions as to deposits.— (1) The National Housing Bank may at any time direct that every housing finance institution which is a company accepting deposits shall furnish to the National Housing Bank and the Reserve Bank in such form, at such intervals and within such time, such statements, information or particulars relating to or connected with deposits received by such housing finance institution, as may be specified by the National Housing Bank by general or special order. (2) Without prejudice to the generality of the power vested in the National Housing Bank under sub-section (1), the statements, information or particulars to be furnished under sub-section (1), may relate to all or any of the following matters, namely, the amount of the deposits, the purposes and periods for which, and the rates of interest and other terms and conditions on which, such deposits are received. (3) Every housing finance institution which is a company receiving deposits, shall, if so required by the National Housing Bank and within such time as the National Housing Bank may specify, cause to be sent at the cost of such housing finance institution, a copy of its annual balance-sheet and profit and loss account or other annual accounts to every person from whom the housing finance institution which is a company holds, as on the last day of the year to which the accounts relate, deposits higher than such sum as may be specified by the National Housing Bank.] 2 [32. Duty of housing finance institutions to furnish statements, etc., under this Chapter.— Every housing finance institution which is a company shall furnish the statements, information or particulars called for by the National Housing Bank or the Reserve Bank, as the case may be, and shall comply with any direction given to it under the provisions of this Chapter.]