The Reserve Bank of India (RBI) took action on Monday to supersede the board of Aviom India Housing Finance Pvt. Ltd, a company specializing in affordable housing finance, due to concerns over governance and failures to meet various payment obligations. The RBI invoked its authority 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 at Punjab National Bank, has been appointed as the administrator.
This regulatory move comes two months after Aviom disclosed that it had received a notice from its statutory auditors, who raised alarms about possible discrepancies in the company’s financial records amid allegations of irregularities. In a statement dated November 22, Aviom acknowledged the discovery of fraud within the organization and reported that it had filed a complaint with the Economic Offences Wing (EOW). The company also indicated that it is currently experiencing liquidity challenges and anticipates delays in interest payments.
The RBI plans to initiate the resolution process for Aviom and will apply to the National Company Law Tribunal (NCLT) in New Delhi to appoint the administrator as the insolvency resolution professional. According to guidelines established in 2019, only a regulator can refer a financial services provider to the bankruptcy tribunal. Unlike typical insolvency resolution professionals, the management of the company will be taken over by an administrator proposed by the regulator and appointed by the tribunal. The RBI had previously taken similar action against Dewan Housing Finance Corp. (DHFL) in 2019.
Aviom India Housing Finance, founded in 2016 by Kajal Ilmi, had a loan portfolio of ₹1,752.4 crore as of March 31, 2024, up from ₹1,034.9 crore a year earlier, according to Icra. Ilmi serves as the managing director and CEO of the company and has extensive international experience, having lived in various countries. She has also worked with notable firms such as PVR and DLF.
On November 28, Crisil Ratings downgraded its long-term rating for Aviom’s bank facilities and non-convertible debentures from ‘Crisil C’ to ‘Crisil D’ due to delays in the repayment of a term loan that was due on November 25, 2024. Crisil received verbal confirmation from one of the lenders regarding this delay on November 27, 2024.
