The Reserve Bank of India (RBI) said on Monday that it has fined LIC Housing Finance Limited Rs. 5 lakh. According to the central bank, the housing finance company failed to establish a floating charge in favour of its depositors on a portion of the assets it invested in accordance with section 29B of the NHB (National Housing Bank) Act and failed to register such charge with the Registrar of Companies. This was discovered during the statutory inspection of the company.
The corporation received a notice instructing it to provide justification as to why a fine should not be levied against it for failing to follow the statutory instructions. The RBI came to the conclusion that the charge of non-compliance was substantiated and called for the imposition of a monetary penalty after taking into account the company’s response to the notice, looking at additional submissions made by it, and listening to oral arguments made during the personal hearing.
The bank regulator stated that this action was taken due to inadequacies in regulatory compliance and was not meant to question the legality of any agreements or transactions the company had made with its clients.