The Reserve Bank of India (RBI) on Monday superseded the board of affordable housing financier Aviom India Housing Finance Pvt. Ltd, citing governance concerns and defaults in meeting various payment obligations.
The regulator said it 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.
The statement from 22 November said that Aviom India Housing Finance was made aware of fraud within the company and had filed a complaint with the Economic Offences Wing (EOW). “Additionally, the company is currently facing liquidity issues and is expecting a delay in the payment of interest,” the 22 November statement said.
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. In 2019, RBI had also superseded the board of erstwhile Dewan Housing Finance Corp. (DHFL) and referred it to the NCLT.
Founded in 2016 by Kajal Ilmi, the New Delhi-based housing finance company had a loan book of ₹1,752.4 crore as on 31 March 2024, as against ₹1,034.9 crore as on 31 March 2023, as per Icra. She also heads the lender as its managing director and chief executive officer. As per her LinkedIn profile, Ilmi “has a vast international exposure having lived in various countries abroad” and is the “daughter of a diplomat of the Indian Government”. It added that Ilmi has worked with companies like PVR and DLF, among others.
Meanwhile, on 28 November 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’.
“The rating downgrade is on account of delay in serving the principal repayment of the term loan facility which was due on 25 November 2024. Crisil Ratings has received verbal communication on 27 Nov 2024 from one of the lenders confirming the same,” Crisil said.
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 ₹42.5 crore on the back of ₹416.8 crore in revenues. The lender sanctioned loans of ₹1,477.3 crore in FY24, as against ₹589.2 crore in the previous financial year.