RBI imposes monetary penalty on HDFC for rule violations

The Reserve Bank of India (RBI) on March 17 imposed a monetary penalty of Rs 5 lakh on Housing Development Finance Corporation Limited (HDFC) for non-compliance with certain rules.

An inspection of the company conducted by National Housing Bank showed that the company failed to transfer matured deposits of certain depositors to designated bank accounts of such depositors during the period 2019-20, the RBI said.

Subsequently, a notice was issued to the company advising it to show cause as to why a penalty should not be imposed on it for failure to comply with the directions, the RBI said.

After considering the company’s reply to the notice, the RBI came to the conclusion that the charge of non-compliance was substantiated and warranted imposition of monetary penalty on the company, the RBI said.

This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the company with its customers, the RBI said.

In a separate press release, the RBI said it imposed penalty of Rs 11.25 lakh on  IGH Holdings Private Limited, Mumbai for non-compliance. The inspection of the company  revealed that the company failed to comply with the statutory requirement of transferring 20 per cent of the net profit as disclosed in its profit and loss account for the financial year 2020-21 to the Reserve Fund.

Also, the company didn't  furnish any credit information to even the CIC, of which it was a member. Subsequently, a notice was issued to the company. After considering the company’s reply, the RBI came to the conclusion that the charge of non-compliance and penalty was imposed, the RBI said.