The Reserve Bank of India (RBI) has taken serious action by giving a penalty to IDFC First Bank and LIC Housing Finance.
Also, they canceled the licenses of 4 NBFCs. The RBI fined IDFC First Bank Rs 1 crore and LIC Housing Finance Rs 49.70 lakh.
These 4 NBFCs will no longer be able to do business
On Friday, the RBI made tough decisions and canceled the registration of 4 NBFCs.
These are Kundles Motor Finance in Uttar Pradesh, Nithya Finance in Tamil Nadu, Bhatia Higher Purchase in Punjab (which deals with Hire Purchase), and Jiwanjyoti Deposits and Advances in Himachal Pradesh.
Because of this action by the Central Bank, these four NBFCs cannot continue doing business.
Fine imposed due to violation of guidelines
The RBI said that IDFC First Bank got a penalty because they didn’t follow some rules properly. This bank broke rules about giving out loans.
The RBI found out that IDFC First Bank gave a loan to a government company against the rules.
Also, LIC Housing Finance was fined because they broke some rules from the RBI about NBFCs and Housing Finance Companies in 2021.
These decisions will not have any impact on customers
Both these companies received warning letters from the RBI. The RBI took this action because they didn’t get a good enough answer.
This action won’t affect how customers or the bank operate.
5 NBFCs returned their licenses
In another message, the RBI mentioned that 5 NBFCs – Growing Opportunity Finance India, Invel Commercial, Mohan Finance, Saraswati Properties, and Quicker Marketing – have given back their licenses because they are no longer in business.
