Aviom India Housing: A Lender Which Relied On Moneylenders—NDTV Profit Exclusive
The RBI has appointed an administrator and an advisory committee to oversee the resolution of Aviom India Housing.
The Reserve Bank of India (RBI) has filed for insolvency proceedings against Aviom India Housing, according to people familiar with the matter.
Aviom India Housing has bank debt of around Rs 1,400 crore and non-convertible debenture (NCD) borrowings worth Rs 400 crore, the people quoted above told NDTV profit, adding that the company has a loan book of around Rs 1,800 crore, which includes loans to fictitious accounts.
The company is also said to have borrowed high-interest loans from moneylenders, the people said. According to the people quoted above, money was borrowed at interest rates ranging from 40-50%, which was then used to repay lenders. As home loans were extended to fictitious borrowers, the moneylender route was devised to keep the lenders satisfied.
These high-interest borrowings were kept off the books, the people said. An audit process is ongoing to determine the size of borrowings from moneylenders currently.
According to details available in the company's annual report for the financial year ending March 2024, HDFC Bank, with a Rs 71 crore outstanding, is its largest lender, while Kotak Mahindra Bank and Northern Arc Capital have also extended Rs 50 crore worth of term loans each to the company. Other major lenders include Poonawalla Fincorp and LIC Housing Finance with a Rs 40 crore exposure each.
The Japanese government's Japan ASEAN Women Empowerment Fund and the Indo-Pacific Liquidity Facility launched by Green Arc Capital in partnership with the US International Development Finance Corporation have both invested in external commercial borrowings by the housing finance company.
On Jan. 27, the banking sector regulator appointed Ram Kumar, former chief general manager of Punjab National Bank, as an administrator at Aviom India Housing, after superseding its board. This was "owing to governance concerns and defaults in meeting various payment obligations," the RBI said.
On Thursday, the regulator also appointed a three-member advisory committee to advise the administrator. This included Paritosh Tripathi, ex-CGM of SBI; Rajneesh Sharma, ex-CGM at Bank of Baroda; and Sanjaya Gupta, ex-MD & CEO of PNB Housing Finance Ltd.
RBI did not immediately respond to a request for comment by NDTV Profit.
While the banking regulator typically avoids insolvency proceedings against regulated lenders, it has done so in the past when the financial position of lenders has worsened significantly. In the past, RBI has taken similar action against other non-bank lenders, including Dewan Housing Finance Ltd, SREI Infrastructure Finance Ltd, and Reliance Capital Ltd.
