RBI Imposes Penalties: Reserve Bank of India has imposed a huge penalty on LIC Housing Finance and IDFC First Bank. According to the Reserve Bank, fine has been imposed on both these financial institutions due to ignoring the rules. RBI has imposed a fine of Rs 1 crore on IDFC First Bank and Rs 49.70 lakh on LIC Housing Finance.
New Delhi: The Reserve Bank of India (RBI) has imposed a penalty of Rs 1 crore on IDFC First Bank and Rs 49.70 lakh on LIC Housing Finance. According to the Reserve Bank, fine has been imposed on both these financial institutions for ignoring the rules. According to an RBI statement, it has imposed penalty on private sector IDFC First Bank for giving infrastructure loan to a government company in 2016 and 2017. The central bank said the penalty has been imposed on IDFC First Bank for non-compliance with certain directions on ‘Loans and Advances – Statutory and Other Restrictions’. In another statement, the RBI said the penalty has been imposed on LIC Housing Finance for non-compliance with certain provisions of the ‘Non-Banking Financial Companies – Housing Finance Companies (Reserve Bank) Guidelines, 2021’ issued by the RBI. Both the cases Penalties have been imposed on deficiencies in regulatory compliance. It is not intended to affect the validity of any transaction or agreement with the respective customers. Meanwhile, the RBI has canceled the certificates of registration (CoR) of four non-banking finance companies (NBFCs) Kundals Motor Finance, Nitya Finance, Bhatia Hire Purchase and Jeevanjyoti Deposits and Advances. After this these companies can no longer do NBFC business.
At the same time, five other NBFCs – Growing Opportunity Finance (India), Invel Commercial, Mohan Finance, Saraswati Properties and Quikr Marketing have returned their registration certificates.
The effect of this action of RBI can be seen on the shares. Last Friday, IDFC Bank shares closed on the green mark with a rise. There is a continuous rise in the bank’s shares. Whereas LIC shares had seen a decline last week. The stock closed with a decline.
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