RBI imposes Monetary Penalty of Rs5 lacs on M/s Hinduja Leyland Finance Ltd
Reserve
Bank of India vida a Press Release informed to public at large regarding
imposing a monetary penalty of ₹5 lakh on M/s Hinduja Leyland Finance Ltd. (the
company).
The monetary
penalty was for violation of directions/orders issued by Reserve Bank of India
from time to time.
Reserve Bank
of India officials inspected books and accounts of the company as on March 31,
2015 between December 30, 2015 and January 14, 2016.
RBI officials observed
that the company process of charging interest and its communication to the
borrower was done in non-transparent manner which was in violation of the Fair
Practices Code guidelines issued by the Bank under Section 45 L of the RBI Act,
1934.
Accordingly,
the company was issued a Show Cause Notice (SCN) on July 29, 2016 for
imposition of penalty. The company’s response to the SCN was not found to be
satisfactory. The company was also accorded a personal hearing by RBI on
February 22, 2017.
After
considering the facts of the case and the company’s reply, as also, personal
submissions made during the hearing, RBI came to the conclusion that the
violations as observed during scrutiny were substantiated which warranted imposition
of monetary penalty on the company. Accordingly, a penalty of ₹5 lakh has been
imposed on the company.
The complete
Fair Practice Code of Hinduja Leyland
Finance Ltd can be read
here.
Hinduja
Leyland Finance Ltd (HLF) was incorporated on November 12, 2008. HLF is one of
India's leading vehicle finance NBFCs with a focus on urban and semi-urban markets.
HLF though its
vast network of branches, finances a wide range of commercial and personal
vehicles, which include medium and heavy commercial vehicles (“MHCVs”), light
commercial vehicles (“LCVs”), small commercial vehicles (“SCVs”), cars,
multi-utility vehicles, three wheelers, and two wheelers, as well as various
kinds of used vehicles.
HLF also
finance tractors and construction equipment, and provide loans against property
(“LAP”). In September 2015, HLF received a certificate to commence housing
finance business through their wholly
owned subsidiary, Hinduja Housing Finance Limited, which focuses on providing
finance for affordable housing loans.
The promoters
of HLF are Ashok Leyland Limited (“ALL”) and Hinduja Power Limited. HLF
leverages the relationship with ALL¸ which is the second largest carrier in the
MHCV segment in India (Source: IAI Report, 2015).
HLF through preferred
financier arrangements with various motor vehicle OEMs provides vehicle finance
products to their customer base.
Apart from
financing normal vehicles, HLF speciality is financing ‘Construction Equipment
Finance’. HLF offers finances to :-
1. Earth Moving Equipments
2. Road Construction Equipments
3. Concrete Equipments
4. Other machines
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