Was DHFL the NBFC under the RBI?

Posted on 20/11/2023 (GMT 07:52 hrs)

I. RETROPECTION

Long ago in 2021, OBMA had approached the National Housing Bank (NHB) by asking about the future fate of the public depositors after the corporate insolvency resolution process (CIRP) of the DHFL. NHB replied the following:

II. RTI ON THE REGULATORY BODY OF THE DHFL

On 21st September, 2023, OBMA filed an RTI to the Department of Economic Affairs, Government of India, with a single sentence question:

Was the Dewan Housing Finance Corporation Limited (DHFL) under the Reserve Bank of India (RBI) before being put under the Insolvency and Bankruptcy Code (IBC)?

Given below is a copy of the online RTI application form:

On 22nd September, 2023, the RTI request was transferred to the Reserve Bank of India:

The RBI partially/provisionally replied to the question on 20/10/2023:

However, the RBI further transferred the application to the National Housing Bank (NHB) for extended clarification on this issue:

RTI Application has been transferred to National Housing Bank under Section 6(3) of RTI Act, 2005.

The NHB replied on 17/11/2023 with the following reply:

Dewan Housing Finance Corporation Limited (DHFL) was under
the regulatory purview of the National Housing Bank (NHB) till
08-08-2019, Pursuant to the Department of Financial Services,
Ministry of Finance Notification No. S.O.2902 (E) dated 09-08-
2019, the regulation of Housing Finance Companies (HFCs) has
been transferred to the Reserve Bank of India with effect from
August 09, 2019.

The two legal documents referred by both the RBI and NHB are given as follows:

1. THE FINANCE (NO.2) BILL, 2019 (page 45 onwards), amended from National Housing Bank Act, 1987, to transform HFCs into NBFCs regulated by the RBI:

2. The RBI’s press release dated 13/08/2019:

Transfer of Regulation of Housing Finance Companies (HFCs) to Reserve Bank of India VIEW HERE ⤡ (As reported on 16th August, 2019 ©SCC Online)

Now the question is: What was the NHB, as a vigilant agency, doing before the Cobrapost findings in January 2019? Was it high on sedatives or sleeping pills? Why could it not stop the massacre (i.e., the DHFL scam) from happening in the first place?

Nevertheless, the NCLT first order (19/05/2021) was totally ignored by Mr. Ajay Piramal and the RBI-appointed Committee of Creditors (CoC) for DHFL. It might be considered as a possible contempt of court.

SEE ALSO:

https://atomic-temporary-188911372.wpcomstaging.com/2023/05/26/rti-deceased-the-state-of-democratic-unfreedom/