RBI Fines Godrej, Aadhar, and HUDCO for Breaking Rules
The Reserve Bank of India (RBI) has imposed monetary penalties on three Non-Banking Financial Companies for not following its rules on housing finance. The companies fined are:
| Company | Penalty Amount |
|---|---|
| Godrej Housing Finance Limited | Rs 5 lakh |
| Aadhar Housing Finance Limited | Rs 5 lakh |
| Housing and Urban Development Corporation Limited (HUDCO) | Rs 3.5 lakh |
The penalties were based on inspections by the National Housing Bank (NHB) as of March 31, 2022. The RBI found that:
- Godrej Housing Finance Limited did not get two independent valuation reports before approving certain large loans.
- Aadhar Housing Finance Limited charged interest on loans before actually giving the money to borrowers.
- HUDCO failed to categorize customer risks, review these risks periodically, and create a floating charge on its assets for depositors.
Doubts Revealed
RBI -: RBI stands for Reserve Bank of India. It is the central bank of India, which means it controls the money supply and interest rates in the country.
Non-Banking Financial Companies -: Non-Banking Financial Companies (NBFCs) are companies that provide financial services like loans and investments but do not have a full banking license. They are different from regular banks.
Godrej Housing Finance Limited -: Godrej Housing Finance Limited is a company that provides home loans and other financial services related to housing.
Aadhar Housing Finance Limited -: Aadhar Housing Finance Limited is another company that offers home loans, especially to people with low and middle incomes.
HUDCO -: HUDCO stands for Housing and Urban Development Corporation Limited. It is a government-owned company that provides loans for housing and urban development projects.
National Housing Bank -: The National Housing Bank (NHB) is a government agency that regulates housing finance companies in India. It ensures that these companies follow the rules and provide fair services.
