RBI Assumes Control of Aviom India Housing’s Board Over Governance Issues

On Monday, the Reserve Bank of India (RBI) took control of the board of Aviom India Housing Finance Pvt. Ltd., citing governance concerns and defaults on various payment obligations. The RBI invoked its powers under Section 45-IE(1) of the Reserve Bank of India Act, following a recommendation from the National Housing Bank (NHB). Ram Kumar, a former chief general manager of Punjab National Bank, has been appointed as the administrator.

This move comes two months after Aviom India Housing Finance disclosed that its statutory auditors had flagged potential discrepancies in the company’s financial records amid allegations of irregularities. In a statement from November 22, the company confirmed it had filed a complaint with the Economic Offences Wing (EOW) after uncovering fraud within its operations. The company also revealed it was facing liquidity challenges and anticipated delays in interest payments.

RBI further stated that it will soon initiate the resolution process for the company and apply to the National Company Law Tribunal (NCLT) in New Delhi to appoint the administrator as the insolvency resolution professional.

According to 2019 guidelines, only a regulator can refer a financial services provider to the bankruptcy tribunal. Rather than the typical insolvency professionals appointed by NCLT, the regulator’s appointed administrator will take over the management of the company. This action follows a similar move in 2019 when the RBI superseded the board of Dewan Housing Finance Corporation (DHFL) and referred it to the NCLT.

Aviom India Housing, founded in 2016 by Kajal Ilmi, had a loan book of ₹1,752.4 crore as of March 31, 2024, up from ₹1,034.9 crore a year earlier, according to Icra. Ilmi, who also serves as the company’s managing director and CEO, has international experience and has worked with companies like PVR and DLF.

On November 28, Crisil Ratings downgraded the company’s long-term rating from ‘Crisil C’ to ‘Crisil D,’ citing delays in the repayment of a term loan due on November 25, 2024. According to Crisil, one of the company’s lenders confirmed the delay in repayment on November 27, 2024.

Lenders to Aviom India Housing include Utkarsh Small Finance Bank, HDFC Bank, Suryoday Small Finance Bank, LIC Housing Finance, and State Bank of India, among others. In FY24, the company reported a net profit of ₹42.5 crore on ₹416.8 crore in revenue and sanctioned ₹1,477.3 crore in loans, up from ₹589.2 crore the previous year.