RBI imposed a fine of Rs 70,000 on Repco Home Finance for regulatory compliance lapses

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RBI penalty on Repco Home

Highlights

RBI imposed a fine of ₹70,000 on Repco Home Finance under Section 52A of the National Housing Bank Act, 1987, for violating the 'Fair Practice Code' guidelines.
During the inspection of the financial position as of March 31, 2025, it was found that the company’s application forms and sanction letters lacked disclosure of risk category and interest rate.
RBI clarified that this action is solely related to deficiencies in regulatory compliance and will have no impact on the validity of transactions with customers.

This article was translated from the original. Read the original version by our correspondent here.

Inspection, Order, and Basis of Violation

According to the Reserve Bank of India’s press release dated June 5, 2026, this penalty has been imposed under Section 52A of the National Housing Bank Act, 1987. The matter pertains to compliance with the instructions issued by RBI under the ‘Fair Practice Code’.

The National Housing Bank conducted a statutory inspection of the company with reference to its financial position as of March 31, 2025. Based on supervisory findings and related correspondence, the company was issued a show cause notice, asking why a penalty should not be imposed for non-compliance with the instructions.

After considering the company’s written response and oral submissions during the personal hearing, RBI found that the company had failed to disclose the methodology for risk categorization and the rationale for charging different interest rates to different categories of borrowers in the application forms and sanction letters. On establishing this charge, the monetary penalty was imposed.

Compliance Signal for the Housing Finance Sector

The central bank clarified that this action is based on regulatory compliance deficiencies and is not intended to comment on the validity of any transaction or agreement between the company and its customers. RBI also stated that this monetary penalty is imposed without prejudice to any other action that may be taken by it in the future.

This move underscores the importance of customer disclosure standards for housing finance companies, especially in cases where interest rates are set differently based on the risk category of borrowers. Such disclosures in application and sanction documents are considered crucial for transparency in loan pricing and consumer protection.

Our previous report on consumer disputes related to the cancellation of flat allotments in Gurugram’s Oyster Grande project highlighted the order of the National Consumer Disputes Redressal Commission, which directed Adani M2K Projects LLP to refund buyers approximately ₹4.97 million with interest. In that order, the commission deemed it unfair to accept payment with conditions and later deny those conditions, providing important signals regarding buyers’ rights, contractual terms, and standards of relief in the housing sector.

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