The Reserve Bank of India on Friday imposed monetary penalties on Godrej Housing Finance Ltd and Aadhar Housing Finance Ltd over non-compliance with certain provisions of the ‘Non-Banking Financial Company – Housing Finance Company (Reserve Bank) Directions, 2021’ issued by the RBI.
The central bank has fined both the housing finance companies a sum of Rs 5 lakks. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 52A of the National Housing Bank Act, 1987.
For Godrej Housing Finance Ltd, RBI said that the company failed to obtain two independent valuation reports before sanctioning certain loans of Rs 75 lakh and above.
On the other hand, for Aadhar Housing Finance Ltd, the apex bank said that the company charged interest on loans for a period prior to the date of actual disbursement of loan / issuance of cheque to certain borrowers in contravention of RBI directions on ‘Fair Practices Code’.
The RBI in its statement highlighted that a statutory inspection of both the companies were conducted by the National Housing Bank with reference to its financial position as on March 31, 2022.
The RBI imposed monetary penalties on fintech companies LenDenClub and LiquiLoans worth Rs 1.99 crores and Rs 1.92 crores respectively for digital lending non-compliance.
“Based on the supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the company advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said directions,” the RBI said in its release.
After considering both the companies’ reply to the notices, oral submissions during the personal hearing and additional submissions made by it, the apex bank found that the following charge against the companies was sustained, warranting imposition of monetary penalty.
RBI fines Housing and Urban Development Corporation Limited
The Reserve Bank of India also imposed monetary penalty of Rs 3.5 lakh on Housing and Urban Development Corporation Limited (the company) for non-compliance with certain provisions of the ‘Reserve Bank of India (Know Your Customer (KYC)) Direction, 2016’ and ‘Non-Banking Financial Company – Housing Finance Company (Reserve Bank) Directions, 2021’ issued by the apex bank.
The RBI highlighted that the company failed to undertake risk categorization of its customers during the financial year 2021-22 and did not put in place a system for periodic review of risk categorisation of accounts.
Further, it did not create floating charge on the assets invested by it in terms of Section 29B of NHB Act, in favour of its depositors and register the same with the Registrar of Companies.
The statutory inspection of the company was conducted by the National Housing Bank with reference to its financial position as on March 31, 2022.
“Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the company advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said directions,” the Central bank said.
After considering the company’s reply to the notice and oral submissions made by it during the personal hearing, RBI found that the following charges against the company were sustained, warranting imposition of monetary penalty.
