Citing governance issues and noncompliance with various payment obligations, the Reserve Bank of India (RBI) superseded the board of Aviom India Housing Finance Pvt. Ltd., a lender of affordable housing.
According to the regulator, it acted in accordance with National Housing Bank's (NHB) recommendation and Section 45-IE(1) of the Reserve Bank of India Act. As the administrator, it named Ram Kumar, a former chief general manager of Punjab National Bank, which is owned by the state.
The lender said in a statement that it had received a notice from its statutory auditors expressing concerns about possible discrepancies in the company's books of accounts due to a complaint alleging certain irregularities, two months prior to the regulatory action.
According to the statement dated November 22, Aviom India Housing Finance had complained to the Economic Offences Wing (EOW) after learning of fraud within the company. The statement dated November 22 added, "The company is also anticipating a delay in the payment of interest due to current liquidity issues."
Additionally, the RBI stated that it plans to soon begin the company's resolution process and submit an application to the National Company Law Tribunal (NCLT), located in New Delhi, to designate the administrator as the insolvency resolution specialist.
A financial services provider may only be referred to the bankruptcy tribunal by a regulator, per the 2019 guidelines. Furthermore, only an administrator nominated by the regulator and chosen by the tribunal will assume management of the business in place of the insolvency resolution specialists normally assigned to NCLT companies. The board of the former Dewan Housing Finance Corp. (DHFL) was also replaced by the RBI in 2019 and the matter was referred to the NCLT.
According to Icra, the housing finance company, which was founded by Kajal Ilmi in 2016, had a loan book of ₹1,752.4 crore as of March 31, 2024, compared to ₹1,034.9 crore on the same date in 2023. In addition, she serves as the managing director and CEO of the lender. Ilmi "has a vast international exposure having lived in various countries abroad" and is the "daughter of a diplomat of the Indian Government," according to her LinkedIn profile. It further stated that among other businesses, Ilmi has collaborated with PVR and DLF.
Crisil Ratings, meanwhile, downgraded its long-term rating on Aviom India Housing Finance's bank facilities and non-convertible debentures from "Crisil C" to "Crisil D" on November 28.
The term loan facility's principal repayment, which was due on November 25, 2024, was delayed, which is why the rating was downgraded. One of the lenders verbally confirmed this to Crisil Ratings on November 27, 2024, according to Crisil.
LIC Housing Finance, HDFC Bank, Suryoday Small Finance Bank, Utkarsh Small Finance Bank, and State Bank of India are some of the lenders to the housing finance company. The lender reported a net profit of ₹42.5 crore in FY24, based on revenues of ₹416.8 crore. In FY24, the lender approved loans totaling ₹1,477.3 crore, compared to ₹589.2 crore in the prior fiscal year.
