RBI takes control of Aviom India Housing’s board on governance concerns
Reserve Bank of India (RBI) has superseded the board of affordable housing financier Aviom India Housing Finance Pvt. Ltd, citing governance concerns and defaults in meeting various payment obligations. RBI exercised powers under Section 45-IE(1) of the Reserve Bank of India Act and as per recommendation of National Housing Bank (NHB). It appointed Ram Kumar, a former chief general manager of state-owned Punjab National Bank, as the administrator. The regulatory action comes two months after the lender said in a statement that it has received a notice from its statutory auditors, raising concerns regarding potential discrepancies in the company's books of accounts in light of a complaint alleging certain irregularities.
RBI also said it intends to shortly initiate the process of resolution of the company and apply to the National Company Law Tribunal (NCLT), New Delhi, for appointing the administrator as the insolvency resolution professional. Under the guidelines issued in 2019, only a regulator can refer a financial services provider to the bankruptcy tribunal. Moreover, instead of insolvency resolution professionals typically appointed for companies in NCLT, only an administrator proposed by the regulator and appointed by the tribunal will take over the management of the company.
Meanwhile, Crisil Ratings downgraded its long-term rating on the bank facilities and non-convertible debentures of Aviom India Housing Finance to ‘Crisil D’ from ‘Crisil C’.
Lenders to the housing finance company include Utkarsh Small Finance Bank, HDFC Bank, Suryoday Small Finance Bank, LIC Housing Finance, State Bank of India, among others. In FY24, the lender reported a net profit of Rs. 42.5 crore on the back of Rs. 416.8 crore in revenues.
