RBI imposed Monetary Penalties on 3 Housing Finances Firms for Violating Norms

RBI has imposed monetary penalties on Godrej Housing Finance, Aadhar Housing Finance and Housing and Urban Development Corporation for non-compliance with RBI direction.

Penalties for non-compliance with RBI Direction

Reetu | Sep 7, 2024 |

RBI imposed Monetary Penalties on 3 Housing Finances Firms for Violating Norms

RBI imposed Monetary Penalties on 3 Housing Finances Firms for Violating Norms

The Reserve Bank of India (RBI) has imposed monetary penalties on Godrej Housing Finance Ltd, Aadhar Housing Finance Ltd and Housing and Urban Development Corporation Ltd for non-compliance with RBI direction. The central bank imposed fines of Rs.5 lakh each on Godrej Housing Finance and Aadhar Housing Finance, as well as Rs.3.5 lakh on Housing and Urban Development Corporation.

The penalties were issued as part of the RBI’s exercise of its powers under Section 52A of the National Housing Bank Act, 1987.

The National Housing Bank conducted the mandatory assessment of Godrej Housing Finance, focusing on its financial situation as of March 31, 2022.

“According to the supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the company directing 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 of India stated.

After reviewing the firm’s response to the notice, the apex bank determined that the following accusation against the company was sustained, resulting in the imposition of a monetary penalty.

“The company failed to obtain two independent valuation reports before sanctioning certain loans of Rs.75 lakh and above,” according to a statement issued by the RBI.

In the Aadhar Housing Finance case, the RBI concluded that the company “charged interest on loans for a period prior to the date of actual distribution of loan/issuance of a cheque to certain borrowers in contravention of RBI directions on ‘Fair Practices Code'”.

The Housing and Urban Development Authority “failed to undertake risk categorisation 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”.

Furthermore, it failed to “create a 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”, according to the Reserve Bank of India.

StudyCafe Membership

Join StudyCafe Membership. For More details about Membership Click Join Membership Button
Join Membership

In case of any Doubt regarding Membership you can mail us at [email protected]

Join Studycafe's WhatsApp Group or Telegram Channel for Latest Updates on Government Job, Sarkari Naukri, Private Jobs, Income Tax, GST, Companies Act, Judgements and CA, CS, ICWA, and MUCH MORE!"




Author Bio
My Recent Articles
SBI cautions Customers about a New Fraud; Advised not to trust calls from CBI and IT Department without Verifying Tax Department sent Rs.114 Crore Income Tax Notice to Daily Wage Earner of Rs.400 CBDT allows Income Tax Exemptions to Legal Services and Aviation Bodies Aditya Birla Fashion gets GST Demand worth Rs.2.46 Crore over ITC Claim Dispute Skill Ministry asks for lower GST for Manpower SupplyView All Posts