RBI has imposed a penalty of ₹1 crore on IDFC First Bank for non-compliance with certain directions on ‘Loans and Advances – Statutory and Other Restrictions’.
The Statutory Inspection for Supervisory Evaluation for FY22 revealed that the bank had sanctioned term loans to a public sector undertaking for financing infrastructure projects without undertaking due diligence on the viability and bankability of the projects to ensure that revenue streams from the projects were sufficient to take care of the debt servicing obligations. Further, the repayment/servicing of the term loans was made out of budgetary resources.
The central bank also fined LIC Housing Finance ₹49.7 lakh for breach of norms. The housing finance company did not comply with certain provisions of the Fair Practices Code when it did not disclose the rate of interest and approach for gradation of risk and rationale for charging different rate of interest to different categories of borrowers in loan application forms and sanction letters. It had also charged pre-payment penalty in housing loans on a floating rate basis which was pre-closed from any source, and a fixed rate basis which was pre-closed from borrowers’ own sources.