The Reserve Bank of India (RBI) has taken significant action against LIC Housing Finance and IDFC First Bank. Along with imposing hefty fines, RBI has also canceled the licenses of 4 Non-Banking Financial Companies (NBFCs), meaning they can no longer conduct business.
According to reports, RBI has imposed a penalty of ₹1 crore on IDFC First Bank and ₹49.70 lakh on LIC Housing Finance.
These 4 NBFCs can no longer operate
On Friday, RBI canceled the Certificate of Registration of 4 NBFCs as part of a major decision. RBI has revoked the registration of Kundles Motor Finance from Uttar Pradesh, Bhatia Hire Purchase from Punjab, Nithya Finance from Tamil Nadu, and Jiwanjyoti Deposits and Advances from Himachal Pradesh. Following RBI’s action, these four NBFCs will no longer be able to conduct business.
Why such a hefty penalty?
RBI has stated that the penalty on IDFC First Bank was imposed due to non-compliance with certain guidelines. It has been revealed that IDFC First Bank violated some regulations related to loans and advances.
According to RBI, IDFC First Bank provided a loan to a public sector entity in violation of RBI regulations. Along with this, RBI has also imposed a significant penalty on LIC Housing Finance. LIC Housing Finance violated some regulations issued by RBI regarding NBFCs and housing finance companies.