New Delhi [India], September 7 : The Reserve Bank of India has imposed monetary penalties on three Non-Banking Financial Companies for non-compliance with directions of RBI on housing finance companies.
As per the official statement from RBI on Friday, it has imposed a monetary penalty of Rs 5 lakh on Godrej Housing Finance Limited, Rs 5 lakh on Aadhar Housing Finance Limited, and Rs 3.5 lakh on Housing and Urban Development Corporation Limited.
These penalties by the regulator have been imposed in the exercise of powers conferred on RBI under the provisions of Section 52A of the National Housing Bank Act, 1987. As per RBI, the statutory inspection of these companies was conducted by the National Housing Bank (NHB) with reference to their financial positions as of March 31, 2022.
The RBI stated that based on the supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the companies advising them to show cause as to why a penalty should not be imposed on them for their failure to comply with the RBI directions.
After considering the companies' replies to the notice, oral submissions during the personal hearing, and additional submissions made by them, the RBI found that Godrej Housing Finance Limited failed to obtain two independent valuation reports before sanctioning certain loans of Rs 75 lakh and above.
For Aadhar Housing Finance Limited, the RBI stated that the company charged interest on loans for a period prior to the date of the actual disbursement of the loan/issuance of the check to certain borrowers, in contravention of RBI directions on the 'Fair Practices Code.'
The penalty on Housing and Urban Development Corporation Limited has been imposed because the company failed to undertake risk categorization of its customers during the financial year 2021-22, did not put in place a system for periodic review of risk categorization of accounts, and did not create a floating charge on the assets invested by it in terms of Section 29B of the NHB Act, in favor of its depositors, and register the same with the Registrar of Companies.
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor