The Reserve Bank of India (RBI) on April 5 said it has imposed Rs 49.70 lakh monetary penalty on LIC Housing Finance for rule violations.
The company has not-complied with certain provisions of the ‘Non-Banking Financial Company - Housing Finance Company (Reserve Bank) Directions, 2021’, the RBI press release said.
LIC Housing Finance did not comply with certain provisions of Fair Practices Code contained in the said directions, when it did not disclose rate of interest and approach for gradation of risk and rationale for charging different rate of interest to different categories of borrowers in loan application forms and sanction letters, the RBI said in the release.
Further, the central bank said the company had charged pre-payment penalty in housing loans on floating rate basis which were pre-closed from any source and fixed rate basis which were pre-closed from borrowers’ own sources.
This action is based on 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 added.
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