RBI Slaps Rs1.49 Crore Penalty IDFC First Bank and LIC Housing Finance for Non-compliance
Moneylife Digital Team 08 April 2024
Reserve Bank of India (RBI) has imposed a penalty of Rs1.49 crore on IDFC First Bank Ltd and LIC Housing Finance Ltd (LICHF) for violating various rules and regulations prescribed by the regulator. The highest penalty of Rs1 crore lakh has been imposed on IDFC First Bank for non-compliance with directions issued by RBI on loans and advances – statutory and other restrictions..
IDFC First Bank's statutory evaluation revealed that the lender had sanctioned term loans to a public sector undertaking (PSU) for financing infrastructure projects without undertaking due diligence on the viability and bankability of the projects to ensure that revenue streams from the projects were sufficient to take care of the debt servicing obligations and the repayment or servicing of the said term loans was made out of budgetary resources.
LIC Housing Finance was penalised Rs49.70 lakh for non-compliance with directions on NBFC - housing finance companies (HFCs).
RBI says the company did not comply with certain provisions of fair practices code contained in its directions. "LICHF did not disclose the rate of interest and approach for gradation of risk and rationale for charging different rates of interest to various categories of borrowers in loan application forms and sanction letters. It also charged pre-payment penalty in housing loans on a floating rate basis, which were pre-closed from any source and a fixed rate basis, which were pre-closed from borrowers' own sources."
"After considering the reply and oral submissions of the bank and the HFC during the personal hearing, RBI concluded that the charges of non-compliance with directions were substantiated and warranted imposition of monetary penalty," the central bank says.
In both cases, RBI says the penalties are based on deficiencies in regulatory compliance and are not intended to be pronounced on the validity of any transaction or agreement they entered into with their customer.
SEBI Impounds Rs12.03 Crore Illegal Gains Earned by Ravindra Bharti Education Institute by Offering 1000% Guaranteed Returns
Moneylife Digital Team 08 April 2024
Market regulator Securities and Exchange Board of India (SEBI) has ordered Ravindra Bharti Education Institute Pvt Ltd, an unregistered investment advisory business set up by financial influencer Ravindra Balu Bharti, to disgorge...
Musk challenges Brazil's court order to block X accounts, says 'lifting all restrictions'
IANS 08 April 2024
Challenging Brazil's court order to block certain popular X accounts, tech billionaire Elon Musk has said that he will lift all the restrictions even if they have to close their office in the country.
This move comes after X Corp...
Will the Supreme Court Put the Brakes on Patanjali's Decade-long Misinformation Spree?
Sucheta Dalal, 05 April 2024
Court proceedings on 2nd April indicate that the Supreme Court (SC) may finally end Patanjali Ayurved’s (Patanjali’s) 10-year spree of misleading advertisements which have made unverified claims about its products while disparaging...
RBI Keeps Repo Rate Unchanged at 6.50%, Sees FY24-25 GDP at 7%
Moneylife Digital Team 05 April 2024
As predicted by economists, the monetary policy committee (MPC) of the Reserve Bank of India (RBI) kept the repo rate unchanged at 6.50% during its first bi-monthly meeting for FY24-25. The marginal standing facility (MSF) rate and...
Free Helpline
Legal Credit