RBI imposed Monetary Penalty on Nido Home Finance Limited for Shareholding Violation

The Reserve Bank of India(RBI) has imposed Monetary penalty of Rs.1.55 lakh on Nido Home Finance Limited for Shareholding Violation.

RBI in a Press release stated as, “Imposition of monetary penalty of Rs.1.55 lakh on Nido Home Finance Limited (formerly known as Edelweiss Housing Finance Limited) (the company) for non-compliance with certain provisions of the Non-Banking Financial Company – Housing Finance Company (Reserve Bank) Directions, 2021. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of clause (b) of sub-section (1) of Section 52A read with clause (aa) of sub-section (3) of Section 49 of the National Housing Bank Act, 1987.”

This action is based on regulatory compliance deficiencies and is not intended to rule on the validity of any transaction or agreement entered into by the company with its customers.

The correspondence regarding the transfer of certain shares of the company between its two group companies revealed, among other things, the company’s failure to obtain prior written permission from the RBI for changes in its shareholding due to progressive increases over time, resulting in acquisition of shareholding beyond the permitted limit. As a result, the company was served with a notice requiring it to show cause why a penalty should not be imposed for failing to comply with the RBI’s directions, as stated therein.

After reviewing the company’s response to the notice, additional submissions made by it, and oral submissions made during the personal hearing, the RBI determined that the charge of non-compliance with the aforementioned RBI directions was substantiated and warranted the imposition of monetary penalty.