RBI imposes penalty on Bajaj Housing Finance for regulatory non-compliance

5 Feb 2024 , 09:19 AM

Bajaj Housing Finance Ltd. (BHFL) was fined ₹ 5 lakh by the Reserve Bank of India (RBI) on Friday for neglecting to get prior written consent prior to a management reorganization that resulted in the replacement of more than 30% of the company’s directors, excluding independent directors.

In a statement, the central bank stated that the company’s alleged non-compliance with the aforementioned statutory directions was supported by evidence and that the implementation of the monetary penalty was appropriate.

The RBI action relates to the National Housing Bank’s (NHB) mandatory investigation of BHFL about its financial status as of March 31, 2022. The regulator stated that the company disclosed this development based on the review of the supervisory letter and inspection report.

The RBI stated that this action is focused on the regulatory compliance inadequacies and is not meant to rule on the legality of any transactions or agreements the company has with its customers.

BHFL, the housing finance division of Bajaj Finance Ltd, was established on June 13, 2008, as a fully-owned subsidiary of Pune-based Bajaj Finserv Ltd. The business became a fully owned subsidiary of Bajaj Finance in the 2015 fiscal year. NHB granted BHFL a Certificate of Registration on September 24, 2015, so that BHFL could establish its housing finance firm.

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