2. While the captioned Prudential Regulations already cover most of the functions relating to banks and DFIs, the following instructions, applicable to DFIs only, may be noted in addition to the above for strict compliance.

(a) CREATION AND BUILDING-UP OF RESERVES:
Every DFI shall credit to its reserve fund an amount not less than 20% of its after tax profits till such time the reserve fund equals the amount of paid-up capital.

Thereafter, a sum not less than 5% of its after tax profit shall be credited to the said fund.

(b) RESTRICTIONS ON CERTAIN TYPES OF TRANSACTIONS
No DFI shall hold, deal or trade in real estate except in use of the DFI itself. In the case of Housing / Mortgage Loans, property acquired from a borrower in consequence of his failing to meet his obligations to the DFI, would be exempt from this regulation provided such properties are disposed off within reasonable time.