The Reserve Bank has imposed a fine of Rs 1 billion on IDFC First Bank and Rs 49.7 million on LIC Housing Finance for violating certain lending norms. RBI said in a statement that the penalty has been imposed on IDFC First Bank for failing to comply with certain instructions regarding “loans and advances – statutory and other restrictions”.
The FY22 statutory examination for supervisory evaluation requires the bank to conduct due diligence on the viability and bankability of the project to ensure that the revenue stream from the project can secure sufficient funds. It was revealed that the government had authorized fixed-term loans to the public sector to finance infrastructure projects. Obligation to repay debt. Term loan repayments/repayments were made from budgetary resources.
Meanwhile, LIC Housing Finance was fined Rs 49.7 million for violation of norms. RBI has found that the housing finance company did not comply with certain provisions of the Fair Practice Code by failing to disclose its approach to interest rates and risk tiers, the basis for charging different interest rates to different categories of borrowers in loan applications. said. and a letter of sanction.
It also imposed prepayment penalties on variable-rate mortgages pre-closed from any source and fixed-rate mortgages pre-closed from the borrower's own funds.
In both cases, the penalties are based on the lack of regulatory compliance and do not declare the validity of the transactions and contracts concluded with the respective customers.
Meanwhile, RBI canceled the certificate of registration (CoR) of four NBFCs – Kundles Motor Finance, Nithya Finance, Bhatia Hire Purchase and Jiwanjyoti Deposits and Advances.
The four companies are currently unable to do business with financial institutions other than banks.
Five more NBFCs have waived CoR. These are Growing Opportunity Finance (India), Invel Commercial, Mohan Finance, Saraswati Properties and Quicker Marketing.
(With input from agency)
