The Reserve Bank of India (RBI) has, by an order dated August 08, 2024, imposed a monetary penalty of ₹5,00,000/- (Rupees Five Lakh only) on Nido Home Finance Limited (the company) for non-compliance with certain provisions of the direction on ‘Co-Lending by Banks and NBFCs to Priority Sector’ issued by RBI. This penalty has been imposed in exercise of powers vested in RBI conferred under section 52A of the National Housing Bank Act, 1987.

The statutory inspection of the company was conducted by the National Housing Bank with reference to its financial position as on March 31, 2022. Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the company advising it to show cause as to why maximum penalty should not be imposed on it for its failure to comply with the said directions.

After considering the company’s reply to the notice, oral submissions made during the personal hearing and examination of additional submissions made by it, RBI found, inter alia, that the following charge against the company was sustained, warranting imposition of monetary penalty. The company failed to ensure that (i) the loan agreements with the borrowers clearly contained the features of the co-lending arrangement and the roles and responsibilities of the company and co-lending bank and (ii) all the details of the arrangement were disclosed to the customers upfront, and their explicit consent was taken.

This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the company with its customers. Further, imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the company.

(Puneet Pancholy)     
Chief General Manager

Press Release: 2024-2025/881