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RBI imposes penalties on IDFC First Bank, LIC Housing Finance and cancels license of 4 NBFCs


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The Reserve Bank of India (RBI) has recently imposed penalties on IDFC First Bank and LIC Housing Finance for violating certain norms. The penalties amount to Rs 1 crore for IDFC First Bank and Rs 49.70 lakh for LIC Housing Finance.

According to the central bank, the penalty on IDFC First Bank was imposed due to non-compliance with certain directions related to “Loans and Advances Statutory and Other Restrictions.” The penalty on LIC Housing Finance, on the other hand, was levied for non-compliance with certain provisions of the “Non-Banking Financial Company – Housing Finance Company (Reserve Bank) Directions, 2021” issued by the RBI.

It is important to note that these penalties are based on deficiencies in regulatory compliance and do not question the validity of any transactions or agreements made by these banks with their customers.

Cancellation of Certificate of Registration for Four NBFCs

In addition to the penalties, the RBI has also cancelled the certificate of registration (CoR) for four non-banking financial companies (NBFCs). These companies are Kundles Motor Finance, Nithya Finance, Bhatia Hire Purchase, and Jiwanjyoti Deposits and Advances. As a result of the CoR cancellation, these four NBFCs are no longer authorized to conduct non-banking financial institution business.

Surrender of Certificate of Registration by Five NBFCs

Furthermore, five other NBFCs have voluntarily surrendered their certificate of registration (CoR) to the RBI. These NBFCs are Growing Opportunity Finance (India), Invel Commercial, Mohan Finance, Saraswati Properties, and Quicker Marketing. By surrendering their CoR, these companies have chosen not to continue their operations as non-banking financial institutions.

This action by the RBI highlights the importance of compliance with regulatory guidelines and serves as a reminder for financial institutions to adhere to the prescribed norms to maintain the integrity and stability of the financial system.

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