The Reserve Bank of India (RBI) has taken action against Bajaj Housing Finance Limited, based in Pune, by imposing a monetary penalty of Rs 5 lakh. This penalty comes as a result of the company’s non-compliance with certain provisions outlined in the ‘Non-Banking Financial Company – Housing Finance Company (Reserve Bank) Directions, 2021’ issued by the central bank.
According to the RBI’s order, Bajaj Housing Finance failed to adhere to the regulatory guidelines specified in the directions. The penalty has been levied by the RBI exercising its powers under the provisions of clause (b) of sub-section (1) of section 52A, along with clause (aa) of sub-section (3) of section 49 of the National Housing Bank Act, 1987.
The central bank clarified that this penalty is a result of deficiencies in regulatory compliance and should not be interpreted as a judgment on the validity of any transactions or agreements made by the company with its customers.
The statutory inspection of Bajaj Housing Finance was conducted by the National Housing Bank, focusing on the company’s financial position as of March 31, 2022. The examination of the inspection report, supervisory letter, and related correspondence revealed, among other things, that the company did not seek prior written permission from the RBI for a change in management that resulted in a change in more than 30 percent of the directors, excluding independent directors.
Following the inspection findings, the company received a notice from the RBI, instructing it to show cause as to why a penalty should not be imposed for the failure to comply with the specified directions. After considering the company’s response to the notice, additional submissions, and oral arguments made during a personal hearing, the RBI concluded that the charge of non-compliance was substantiated and justified the imposition of a monetary penalty on Bajaj Housing Finance.
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