The
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
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 did not comply with certain provisions of Fair Practices Code contained in the said directions, when it i) did not disclose 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 and ii) had charged pre-payment penalty in housing loans on (a) floating rate basis which were pre-closed from any source and (b) fixed rate basis which were pre-closed from borrowers' own sources.
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.
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