06-Apr-2024
2 mins read
RBI (Reserve Bank of India) has taken acting against IDFC Bank and LIC Housing Finance for non-meeting the regulatory measures. It is reported that IDFC First Bank and LIC Housing Finance face penalties, while Kundles Motor Finance, Nithya Finance, Bhatia Hire Purchase, and Jiwanjyoti Deposits and Advances have had their registrations canceled. In simple terms, these actions show that the RBI is dedicated to making sure that the financial system is open and fair for everyone.
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Penalties on IDFC First Bank and LIC Housing Finance
IDFC First Bank faces a penalty of Rs 1 crore for not cooperating to meet the regulatory guidelines concerning 'Loans and Advances - Statutory and Other Restrictions'. Similarly, LIC Housing Finance also faces the penalty of Rs 49.70 lakh for violating regulations of 'Non-Banking Financial Company - Housing Finance Company (Reserve Bank) Directions, 2021'. RBI aim is that even though the penalties are big, they are mainly meant to fix problems with following the rules, not to challenge whether certain transactions are right or wrong. So, the focus is on making sure rules are followed properly rather than doubting individual transactions.
Cancellation of Registration for Four NBFCs
RBI have cancelled the certificate of registration (CoR) for four Non-Banking Financial Companies (NBFCs). Kundles Motor Finance, Nithya Finance, Bhatia Hire Purchase, and Jiwanjyoti Deposits and Advances, as they are not allowed to participate in NBFC activities. RBI want to make sure that rules are followed closely to keep the financial system trustworthy.
Voluntary Surrender of CoR by Five NBFCs
Five Non-Banking Financial Companies (NBFCs) have decided by their own to give up their Certificate of Registration (CoR). These companies are Growing Opportunity Finance (India), Invel Commercial, Mohan Finance, Saraswati Properties, and Quicker Marketing. The exact reason has not yet known but the possible reasons could be that, they realize it's difficult to meet all the rules set by regulators, or they might be changing their business plans.
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