RBI Issues Housing Finance Companies Second Amendment Directions 2026: Key Changes to Advertising, Marketing and Sales Norms
Overview of the Amendment
The Reserve Bank of India has issued a significant regulatory update through RBI/2026-27/124 DOR.MCS.REC.No.103/01-01-039/2026-27, dated June 15, 2026, formally titled the Reserve Bank of India (Housing Finance Companies) Second Amendment Directions, 2026. This circular brings about structural changes to the compliance obligations of Housing Finance Companies (HFCs) with respect to how they advertise, market, and sell financial products and services.
The amendment is set to take effect from January 1, 2027, and signals a broader shift in how the RBI intends to regulate conduct-related standards across the Non-Banking Financial Company (NBFC) ecosystem, including HFCs.
Background and Regulatory Context
Previously, the RBI had incorporated instructions governing Advertising, Marketing and Sales for HFCs within Chapter-X on 'Fair Practices Code' as part of the Reserve Bank of India (Housing Finance Companies) Directions, 2025. These provisions, contained in paragraphs 150 to 154, alongside the Code of Conduct for DSAs/DMAs (paragraphs 155 to 157), laid down the conduct expectations for HFCs in their customer-facing marketing and sales activities.
However, following a comprehensive review of these existing provisions, the RBI determined that a more unified and consolidated framework was necessary — one that applies consistently across all NBFCs rather than leaving each category of entity governed by separate, fragmented instructions.
As a result, the RBI has decided to bring advertising, marketing, and sales norms for all eligible NBFCs — including HFCs — under the umbrella of a single set of directions, namely the Reserve Bank of India (Non-Banking Financial Companies — Responsible Business Conduct) Directions, 2025.
Legal Authority for the Amendment
The amendment has been issued in exercise of powers vested under Section 30A of the National Housing Bank Act, 1987, with the RBI being satisfied that the issuance of these directions is necessary and expedient in public interest.
This statutory basis underscores the RBI's broad regulatory mandate to prescribe conduct standards for HFCs and ensures that the directions carry binding legal force.
What Has Changed: Modifications to the HFC Directions 2025
Deletion of Existing Sub-Sections
The amendment specifically targets Chapter-X (Fair Practices Code) of the Reserve Bank of India (Housing Finance Companies) Directions, 2025. The following sub-sections stand deleted:
- Sub-section A.10 — Advertising, Marketing and Sales (paragraphs 150 to 154)
- Sub-section A.11 — Code of Conduct for DSAs/DMAs (paragraphs 155 to 157)
These two sub-sections, which previously governed the marketing conduct and distribution channel oversight for HFCs, are being removed from the HFC-specific directions entirely.