Godrej Housing, HUDCO, and Aadhar Housing Finance face fines from the RBI.

NEW DELHI: The Reserve Bank of India (RBI) has levied monetary penalties on three Non-Banking Financial Companies (NBFCs) for failing to comply with its directives for housing finance companies.

According to an official statement from the RBI on Friday, it has imposed a 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 (HUDCO).

The regulator has enforced these penalties under the powers granted to the RBI through Section 52A of the National Housing Bank Act, 1987. The statutory inspection of these companies was conducted by the National Housing Bank (NHB) based on their financial positions as of March 31, 2022.

The RBI, in its statement, mentioned that based on supervisory findings indicating non-compliance with its directives and following related communications, the companies were issued notices. These notices required the companies to explain why penalties should not be imposed on them for failing to adhere to RBI guidelines.

After considering the responses from the companies, oral submissions during personal hearings, and additional documentation provided, the RBI concluded that Godrej Housing Finance Limited did not obtain two independent valuation reports before approving certain loans of Rs 75 lakh and above.

In the case of Aadhar Housing Finance Limited, the RBI noted that the company charged interest on loans for a period before the actual disbursement or issuance of the check to some borrowers, violating RBI directives under the ‘Fair Practices Code.’

As for Housing and Urban Development Corporation Limited (HUDCO), the penalty was imposed for the company’s failure to conduct risk categorization of its customers during the 2021-22 financial year.

Additionally, HUDCO did not implement a system for periodic reviews of risk categorization, failed to create a floating charge on the assets it invested in favor of its depositors in line with Section 29B of the NHB Act, and did not register this with the Registrar of Companies. (ANI)