¹[29A. Requirement of registration and net owned fund.-- ²[(1) Notwithstanding anything contained in this Chapter or in any other law for the time being in force, no housing finance institution which is a company shall commence housing finance as its principal business or carry on the business of housing finance as its principal business without--
         (a) obtaining a certificate of registration issued under this Chapter; and
         (b) having the net owned fund of ten crore rupees or such other higher amount, as the Reserve Bank may, by notification, specify.
     (2) Every housing finance institution which is a company shall make an application for registration to the Reserve Bank in such form as may be specified by the Reserve Bank:
     Provided that an application made by a housing finance institution which is a company to the National Housing Bank and pending for consideration with the National Housing Bank as on the date of commencement of the provisions of Part VII of Chapter VI of the Finance (No.2) Act, 2019, shall stand transferred to the Reserve Bank and thereupon the application shall be deemed to have been made under the provisions of this sub-section and shall be dealt with accordingly:
     Provided further that the provisions of this sub-section shall not apply to the housing finance institution which is a company and having a valid registration certificate granted under sub-section (5) on the date of commencement of the provisions of Part VII of Chapter VI of the Finance (No.2) Act, 2019, and such housing finance institution shall be deemed to have been granted a certificate of registration under the provision of this Act.]
     ³*                             *                                 *                                 *                                 *
     (4) The ⁴[Reserve Bank], for the purpose of considering the application for registration, may require to be satisfied by an inspection of the books of such housing finance institution or otherwise that the following conditions are fulfilled:--
         (a) that housing finance institution is or shall be in a position to pay its present or future depositors in full as and when their claims accrue;
         (b) that the affairs of the housing finance institution are not being or are not likely to be conducted in a manner detrimental to the interest of its present or future depositors;
         (c) that the general character of the management or the proposed management of the housing finance institution shall not be prejudicial to the public interest or the interests of its depositors;
         (d) that the housing finance institution has adequate capital structure and earning prospects;
         (e) that the public interest shall be served by the grant of certificate of registration to the housing finance institution to commence or to carry on the business in India;
         (f) that the grant of certificate of registration shall not be prejudicial to the operation and growth of the housing finance sector of the country; and
         (g) any other condition, fulfilment of which in the opinion of the ⁴[Reserve Bank], shall be necessary to ensure that the commencement of or carrying on the business in India by a housing finance institution shall not be prejudicial to the public interest or in the interests of the depositors.
     ⁵[Provided that the Reserve Bank may, wherever it considers necessary so to do, require the National Housing Bank to inspect the books of such housing finance institution and submit a report to the Reserve Bank for the purpose of considering the application.]
     (5) The ⁴[Reserve Bank] may, after being satisfied that the conditions specified in sub-section (4) are fulfilled, grant a certificate of registration subject to such conditions which it may consider fit to impose.
     (6) The ⁴[Reserve Bank] may cancel a certificate of registration granted to a housing finance institution under this section if such institution--
             (i) ceases to carry on the business of a housing finance institution in India; or
             (ii) has failed to comply with any condition subject to which the certificate of registration had been issued to it; or
             (iii) at any time fails to fulfil any of the conditions referred to in clauses (a) to (g) of sub-section (4); or
             (iv) fails--
         (a) to comply with any direction issued by the ⁶[Reserve bank or the National Housing Bank] under the provisions of this Chapter; or
         (b) to maintain accounts in accordance with the requirement of any law or any direction or order issued by the ⁶[Reserve bank or the National Housing Bank] under the provisions of this Chapter; or
         (c) to submit or offer for inspection its books of account and other relevant documents when so demanded by an inspecting authority of the ⁶[Reserve bank or the National Housing Bank]; or
         (v) has been prohibited from accepting deposit by an order made by the National Housing Bank under the provisions of this Chapter and such order has been in force for a period of not less than three months:
     Provided that before cancelling a certificate of registration on the ground that the ⁷[housing finance institution which is a company] has failed to comply with the provisions of clause (ii) or has failed to fulfil any of the conditions referred to in clauses (a) to (g) of sub-section (4), the ⁸[Reserve Bank], unless it is of the opinion that the delay in cancelling the certificate of registration shall be prejudicial to public interest or the interest of the depositors or the ⁷[housing finance institution which is a company], shall give an opportunity to such institution on such terms as the ⁸[Reserve Bank] may specify for taking necessary steps to comply with such provision or fulfilment of such condition:
     Provided further that before making any order of cancellation of certificate of registration, such institution shall be given a reasonable opportunity of being heard.
     (7) A housing finance institution aggrieved by the order or rejection of application for registration or cancellation of certificate of registration may prefer an appeal, within a period of thirty days from the date on which such order of rejection or cancellation is communicated to it, to the Central Government and the decision of the Central Government where an appeal has been preferred to it, or of the ⁸[Reserve Bank] where no appeal has been preferred, shall be final:
     Provided that before making any order of rejection of appeal, such institution shall be given a reasonable opportunity of being heard.
     Explanation.-- For the purposes of this section,--
             (I) "net owned fund" means--
         (a) the aggregate of the paid-up equity capital and free reserves as disclosed in the latest balance-sheet of the housing finance institution after deducting therefrom--
             (i) accumulated balance of loss;
             (ii) deferred revenue expenditure; and
             (iii) other intangible assets; and
         (b) further reduced by the amounts representing--
     (1) investments of such institution in shares of--
             (i) its subsidiaries;
             (ii) companies in the same group;
             ⁹[(iii) all other housing finance companies; and]
     (2) the book value of debentures, bonds, outstanding loans and advances (including hire-purchase and lease finance) made to, and deposits with,--
             (i) subsidiaries of such company; and
             (ii) companies in the same group, to the extent such amount exceeds ten per cent. of (a) above;
             ¹⁰[(II) the expressions subsidiaries and companies in the same group shall have the meanings respectively assigned to them in the Companies Act, 2013 (18 of 2013):
     Provided that the National Housing Bank shall, in consultation with the Reserve Bank, specify the companies to be deemed to be in the same group.]