Reserve Bank of India – Press Releases

The Reserve Bank of India (RBI) has, by an order dated October 21, 2022, imposed a financial penalty of ₹5.00 lakh (Rupees Five lakh solely) on LIC Housing Finance Limited, Mumbai (the corporate) for non-compliance with sure provisions of “The Housing Finance Companies (NHB) Directions, 2010” issued by the National Housing Bank (NHB) on July 02, 2018 learn with the press launch dated August 13, 2019 issued by the Reserve Bank of India (the Bank) on “Transfer of Regulation of Housing Finance Companies (HFCs) to Reserve Bank of India”. This penalty has been imposed in train of powers vested in RBI below the provisions of clause (b) of sub-part (1) of part 52A learn with clause (aa) of sub-part (3) of part 49 of the National Housing Bank Act, 1987 (NHB Act).

This motion is predicated on the deficiencies in regulatory compliance and isn’t meant to pronounce upon the validity of any transaction or settlement entered into by the corporate with its prospects.

Background

The statutory inspection of the housing finance firm, performed by NHB just about its monetary place as on March 31, 2020 and examination of the Inspection Report, supervisory letter and all associated correspondence pertaining to the identical revealed, inter alia, the corporate’s failure to create floating cost in favour of its depositors on a portion of the belongings invested by it in phrases of part 29B of NHB Act, and non-registration of such cost with the Registrar of Companies. In furtherance to the identical, a discover was issued to the corporate advising it to point out trigger as to why penalty shouldn’t be imposed on it for failure to adjust to the statutory instructions, as said therein.

After contemplating the corporate’s reply to the discover, examination of further submissions made by it and oral submissions made through the private listening to, RBI got here to the conclusion that the cost of non-compliance with the aforesaid statutory instructions was substantiated and warranted imposition of financial penalty.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2022-2023/1121