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Housing Lender Under Fire for Fake Loans
10 Sep
Summary
- SRG Housing Finance faces probe over fictitious loan accounts.
- About one-third of lender's portfolio suspected as phantom accounts.
- Irregularities include suspected NPA manipulation and evergreening.
The National Housing Bank (NHB) has flagged SRG Housing Finance, a Rajasthan-based affordable housing lender, following an investigation that uncovered suspected fictitious loan accounts. These dubious accounts, estimated between ₹300-400 crore, represent approximately one-third of the company's total loan book, which stood at ₹1,076 crore in June.
NHB's findings indicate that loans were disbursed without verifiable underlying customers or corresponding assets. The inquiry also identified potential instances of evergreening and manipulation of non-performing assets. Allegations suggest funds from these suspect accounts may have been rerouted to entities linked to the promoters.
SRG Housing Finance, led by Managing Director Vinod Kumar Jain, reported healthy asset quality with gross NPAs at 1.73% for the June quarter. However, these reported figures contrast sharply with the ongoing investigation into significant irregularities. The company has a history of growth, crossing the ₹1,000 crore assets under management milestone.
This development occurs amidst increased regulatory oversight of smaller housing finance firms, following past issues at companies like Aviom India Housing Finance. NHB has classified SRG's account as a Red Flagged Account (RFA) and reported it to the RBI, initiating a process that typically requires resolution within 180 days.
