RBI imposes Rs 5 lakh penalty on HDFC as it failed to transfer matured deposits to certain customers

The Reserve Bank of India has imposed a penalty of Rs 5 lakh on Housing Development Finance Corporation Limited (HDFC) for non-compliance with certain provisions issued by the National Housing Bank (NHB), the central bank said on Friday, 17 March.

Giving details, the Reserve Bank of India (RBI) said a statutory inspection of the company was conducted by NHB with reference to its financial position as on March 31, 2020.

HDFC failed to transfer matured deposits of certain depositors to designated bank accounts of such depositors during the period 2019-20, the RBI said in a statement.

In furtherance to the same, a notice was issued to the company advising it to show cause as to why penalty should not be imposed on it for failure to comply with the directions, as stated therein.

"After considering the company's reply to the notice, additional submissions made by it and oral submissions made during the personal hearing, RBI came to the conclusion that the charge of non-compliance with the aforesaid statutory directions was substantiated and warranted imposition of monetary penalty on the company, to the extent of non-compliance with the directions," it said.

In a stock exchange filing, HDFC informed about the penalty and said it will be taking necessary steps to comply with the RBI's letter in this regard.

The Finance (No. 2) Act, 2019, amended the National Housing Bank Act, 1987 conferring certain powers for regulation of Housing Finance Companies (HFCs) with the RBI.

In another statement, the RBI said that it has imposed a penalty of Rs 11.25 lakh on IGH Holdings Private Limited, Mumbai for non-compliance with certain provisions.

In both cases, the RBI said the penalties are based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the companies with their customers.

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With PTI inputs