New Delhi: The Reserve Bank of India on Friday imposed monetary penalties on Godrej Housing Finance Ltd, Aadhar Housing Finance Ltd and Housing and Urban Development Corporation Ltd for non-compliance.
The central bank imposed a fine of Rs five lakh each on Godrej Housing Finance and Aadhar Housing Finance, and Rs 3.5 lakh on the Housing and Urban Development Corporation.
The penalties have been imposed in exercise of the powers conferred on the RBI under the provisions of Section 52A of the National Housing Bank Act, 1987.
The statutory audit of Godrej Housing Finance was conducted by National Housing Bank with reference to its financial position as on March 31, 2022.
“Based on the findings of the supervisors regarding non-compliance with the RBI’s directions and related correspondence thereon, a notice was issued to the company advising it to show cause as to why penalty should not be imposed on it for its non-compliance with the said directions,” the RBI said. After considering the company’s response to the notice, the central bank found that the following charges were maintained against the company, warranting imposition of monetary penalty.
“The company failed to obtain two independent valuation reports before sanctioning certain loans of Rs 75 lakh and above,” the RBI said in its statement.
In the case of Aadhar Housing Finance, the RBI found that the company “charged interest on loans for a period preceding the date of actual disbursement of loan/issuance of cheque to certain borrowers in contravention of the RBI’s directions on the ‘Code of Fair Practices’.”
The Housing and Urban Development Corporation “failed to perform risk categorisation of its customers during the financial year 2021-22 and did not implement a system for periodic review of risk categorisation of accounts.”
Nor did it “create a floating charge on the assets invested by it in terms of Section 29B of the NHB Act, in favour of its depositors and register the same in the Registrar of Companies,” the RBI said.
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