What changed
RBI, via an order dated June 18, 2026, levied a monetary penalty of ₹2.70 lakh on Can Fin Homes Limited. The penalty stems from non-compliance with Fair Practices Code directions, specifically the failure to provide borrowers a clear bifurcation of interest and principal in loan instalments.
What it means for you
This penalty underscores RBI's zero-tolerance for opaque loan disclosures, even for small amounts. Lenders must ensure every loan statement explicitly breaks down principal and interest components. Non-compliance invites regulatory action, reputational risk, and potential further scrutiny.
What you must do
- Audit all loan repayment schedules and statements to ensure clear bifurcation of interest and principal.
- Train loan servicing teams on Fair Practices Code disclosure requirements.
- Review internal compliance checklists against NHB/RBI inspection findings.
- Implement automated checks in loan management systems to flag missing bifurcation.
Who it affects
Housing finance companies (HFCs), Loan servicing and compliance teams
What specific rule did Can Fin Homes violate?
The company failed to clearly indicate the split between interest and principal in loan instalment collections from borrowers, as required under RBI's Fair Practices Code directions.
What is the penalty amount and legal basis?
The penalty is ₹2.70 lakh, imposed under Section 52A of the National Housing Bank Act, 1987, based on supervisory findings from NHB inspection as of March 31, 2025.
Does this penalty affect Can Fin Homes' customer transactions?
No. RBI clarified the action is based on regulatory compliance deficiencies and does not invalidate any transaction or agreement with customers.